Credit bureaus compete on extras

The battle is being fought more on providing benefits that may not impact your credit scores.

The rise in the number of credit information companies or CICs — with Experian, Equifax and High Mark entering the space along with Credit Information Bureau (India) or Cibil — was supposed to bring in competition and lead to better quality data for banks to evaluate.

The pricing of the credit information reports (CIRs) for these agencies is at par — Cibil (Rs 142), Equifax (Rs 138) and Experian (Rs 138), and competitive. However, whether the data will be of better quality is a question mark.

Each bureau is covering additional information, but these are mostly qualitative in nature. Equifax, for instance, includes details pertaining to your occupation and income in your credit report, while other players don’t. Similarly, the bureau even lists your last five residential addresses.

“This detail is meant to give credit institutions a sense of your ‘address stability’ or your propensity to switch locations,” says Samir Bhatia, MD and CEO, Equifax Credit Information Services. Such additional data points serve just as frills and should not really affect your actual scores.

However, bankers do not attach much importance to these. “It must be looked at in conjunction with other factors like lease tenures and reasons for frequent address changes. At best, it will point one in a direction for asking more questions,” says Shyamal Saxena, general manager, retail banking products, Standard Chartered Bank.

To differentiate itself from competition, these companies are moving beyond just providing additional data points in the reports. Experian is planning a tie-up with debt counsellors such as Disha Financial Counselling for providing free advisory services to the customer. “When customers access their credit reports, they can find themselves in a debt trap. These services could be availed free of cost for seeking advice on debt restructuring or even how they could improve their credit scores,” says Mohan Jayaraman, COO, Experian India.

Saxena sees this as a welcome move. “An independent body advising individuals to manage debt will definitely guide them better as compared to banks, who have a stake in it,” he said.
 

TRACK REPORT
	Cibil	Experian	Equifax
Credit report price	Rs 142 (CIR)	Rs 138	Rs 138
Days to receive  the credit report	7 days	20 days	10 days
Access credit scores	Yes	No	No
Additional data / services	Maintains a separate score  only on personal loans	Offer free debt counselling or advisory services  to consumers	Includes information on income, occupation, last five residential addresse
	Has telecomm companies on board, accessing the credit history of consumers	Sign up for regular   updates for changes,  if any, in credit report	Portfolio alert through  which bureau tracks credit profile

Experian also plans to let consumers sign up for regular updates in future for a fee. They would get alerts each time their account gets updated with additional information or any lender looks up their report. Even without such updates, consumers are advised to regularly check their credit history to protect themselves against potential identity theft or fraud.

Equifax has rolled out a product known as Portfolio Alert for lenders. It enables them to track the changing profile of customers. For instance, a customer may have taken his first credit card from Bank A. Within months, say, he has got three other cards. His profile has thus changed for Bank A since it first approved the card, as he has much more credit on hand.

However Sanjay Agarwal, senior vice-president and group head (retail strategy and branding), Arcil, feels there won’t be much impact on consumers. “It is just a way to put the information in a different way. Your repayment history is already known to the lender. And, over a period of time, he will know that your profile is changing.”

Many individuals may take only consumer or personal loans. Cibil, therefore, tracks your personal loan scores as well. However, this is only accessible to banks. You can view the details only as a part of the overall credit report and not separately.