Have you ever checked your credit score only to find that it differs across various Credit Bureaus? You’re not alone! This can be confusing and even frustrating, especially when you are trying to keep your credit score in good shape for an important financial decision, like applying for a home or car loan. This phenomenon is more common than you think, and it’s essential to understand why it happens.

There are four Credit Bureaus in India : TransUnion CIBIL, Equifax, Experian, and CRIF Highmark. Each bureau maintain a common database and uses  different /algorithms criteria to calculate credit scores.

Why Scores Differ:

1. Data discrepancies: Each Bureau may have different information about your credit history, leading to varying scores because of the data quality and filtration of data.
2. Scoring models: Credit Bureaus use different scoring models, which can produce different results.
3. Update frequencies: Bureaus may update their information at different times, causing temporary score discrepancies. Recent RBI circular regarding credit reporting of data in 15 days cycle will help in faster reporting of changes in the credit history of an individual which will help lenders improve their decision-making when granting credit. 

What It Means for a Borrower:

1. Lender perspective: Different lenders may use different bureaus, so it’s essential to check your score across all four Credit Bureaus
2. Credit monitoring: Regularly monitoring your scores can help you identify errors or discrepancies.
3. Score optimization: Understanding the differences in score, can help you optimize your credit habits for better credit scores.

While it may seem confusing, understanding the reasons behind differing credit scores can empower you to take control of your credit health. Remember to check your credit scores regularly and dispute any errors to ensure accuracy.

Did you know you can get 4 free credit reports in a calendar year? Back in September 2016, the RBI had mandated that each Credit Bureau has to provide one free credit report per calendar year to each consumer, which means you can get four free credit reports in a calendar year

Remember, your credit score is a vital part of your financial life, so keeping it accurate and in good standing should be a priority.

“Different scores, one goal: a stronger financial future starts with understanding your credit.”