What is CRIF: Its importance & Difference between Cibil & CRIF Score

In recent years, more people have realised that credit is a helpful tool for meeting their needs and desires without depleting their savings. You can keep your savings intact and lead your regular lifestyle while repaying the EMIs gradually. However, before applying for credit, you need a good CIBIL score, which you can check for free online. Credit scores, provided by credit bureaus, are considered by lenders before approving your loan or credit card.

In India, there are four credit bureaus, including CRIF full form - The Centre for Research in International Finance) and CIBIL (full form - Credit Information Bureau (India) Limited). In this article, we will talk about the differences between CRIF vs. CIBIL.

What is a CRIF?

As mentioned, CRIF full form - The Centre for Research in International Finance High Mark is a credit information company operating as a credit bureau in India since 2010. It generates CRIF scores for entities and individuals ranging from 300 to 900. A score above 700 is good enough for easy loan approvals at better interest rates. Before sanctioning your loan application, lending institutions can request your CRIF credit report to check your credit history.

What is a CIBIL?

CIBIL, backed by TransUnion CIBIL Limited (formerly Credit Information Bureau (India) Limited), is an authorised agency in India responsible for calculating credit users’ credit scores. It is the first recognised credit bureau in the country to assign 3-digit CIBIL scores ranging between 300 and 900. Your CIBIL score summarises the credit history that lending institutions use to determine your creditworthiness. Again, a score above 700 is enough to get quick loan approvals at lower interest rates and favourable terms and conditions.

Differences Between CRIF And CIBIL

Here, we will dive deep into CRIF vs CIBIL, two of the most popular credit rating agencies in India:

• Identity: CRIF High Mark is an RBI-approved credit rating agency in India serving credit products to rural, retail, MSME, and commercial customers. The company, established in 2005, is based in Mumbai. TransUnion CIBIL Limited is another credit reporting company in India maintaining credit files for 32 million companies and 600 million retail customers.
• Licensing: CRIF directly falls under the responsibility of the RBI (Reserve Bank of India). Although CIBIL is regulated and registered under the RBI, it falls under the regulation of TranUnion, a private unlisted company.
• Operations in India: While CIBIL is the first credit bureau operating in India since 2000, CRIF started its Indian operations in 2010.
• Credit Score Calculations: Although both agencies use similar parameters to calculate credit scores, CIBIL emphasises factors like credit history length and diversity in the credit portfolio. That means you must have a longer credit history with a balance between secured and unsecured credit products. On the other hand, CRIF is more sensitive to recent account activities and credit enquiries.

CRIF Score vs CIBIL Score

Now that you understand the CRIF meaning and know how it differs from CIBIL, let's explore the CRIF score vs CIBIL score to recognise their differences.

What Factors Affect My CRIF Credit Score?

CRIF High Mark uses several factors to determine your credit score. These include the following:

• Repayment history
• Credit utilisation ratio
• Debt-to-income ratio
• Recent loan applications and hard enquiries
• Length of credit history
• Types of accounts in your credit portfolio
• Current outstanding credit balances

How Can I Improve My CRIF Credit Score?

After understanding CRIF vs CIBIL and how they work, learning how to improve the CRIF credit score to get the best credit deals is important. Here are a few ways to enhance your CRIF score:

• Make timely and prompt repayments on all your loans and credit card bills.
• Keep your credit utilisation ratio under 30%. For instance, if your credit limit is Rs 1 Lakh, try not to spend more than Rs 30,000.
• Restrict your loan applications and hard enquiries, such as loan and credit card applications.
• Retain old accounts and credit cards, as their age will work in your favour to increase your credit length, and you will also get their credit limit.
• Check your credit report at regular intervals to identify and rectify any errors.
• Check your score from time to time to track the status and improve if needed.
• Maintain a debt-to-income ratio below 30-40%, indicating sufficient disposable income to accommodate another loan EMI within the monthly budget.
• Diversify your credit portfolio with different loan types, both secured and unsecured.

Conclusion

Both CRIF and CIBIL are reputable credit bureaus in India with their own data set that lenders use to assess your creditworthiness. Understanding CRIF vs CIBIL will help you make an informed decision when evaluating credit options. It is advisable to check your CIBIL score with your PAN card occasionally and improve your credit profile.

Frequently Asked Questions

1. What is the purpose of CRIF?

CRIF is a credit bureau that aims to calculate credit scores for businesses and individuals. Lending institutions use these scores to determine their loan applicants’ credit history and repayment capacity.

2. What is the highest CRIF score in India?

The CRIF score in India ranges from 300 to 900. So, 900 is the highest CRIF score in India.

3. Why is my CRIF score 17?

If you see 17 in your CRIF report, it is not your credit score. It is an exclusion code that appears when the credit bureau does not get enough information about your credit history to calculate your CRIF score.

4. What is TransUnion CIBIL Score?

A TransUnion CIBIL Score is a credit rating that reflects your creditworthiness. You can check your TransUnion CIBIL score free through various services and apps that offer this feature.