A Guide To Credit Reports

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>Not sure how credit information reports and scores effect your chances of getting that home loan? <strong>Vikram Narayan</strong>, Country Manager &amp; Managing Director, Experian India talks to <em>Businessworld</em>'s <strong>Tanushree Pillai </strong>about the importance of credit reports and scores and how individuals and lenders can benefit from these. <br><br><strong>Excerpts: </strong><br><br><strong>What is the job of a credit bureau and who all can avail of its services?</strong><br>A Credit Bureau or Credit Information Company (CIC) as it is known in India, is an independent organisation that compiles public data, statutory information, identity information, credit transactions and payment histories of individual consumers and organisations. A CIC such as the Experian Credit Information Company of India, stores information provided by various sources in the same way as it is provided to them - the CIC does not alter or represent the data in any other way. Similarly a CIC does not offer opinions on the data they hold or make any decisions on behalf of lenders who use their services and reports in the credit decision making process.<br><br>A CIC simply provides the data that is held about an individual borrower to the lender who will make their own assessment based on a range of factors, including the data we manage. The role of a Credit Information Company is to facilitate a culture of information sharing amongst lenders; to provide accurate information to lenders; to make it possible for lenders to quickly make fair, consistent, responsible and profitable lending decisions; to facilitate mass market access to credit, without security; to protect consumers against over indebtedness by providing a full picture of credit exposure and therefore capability to repay; to help lenders guard against fraud, which is a growing and serious problem; to provide consumers with copies of their Experian Credit Information Reports upon request; to educate consumers on the importance of Credit Information Companies; to promote responsible lending and responsible borrowing.<br><br>Only organisations as described by the Reserve Bank of India under the Credit Information Companies (Regulation) Act 2005 (CICRA 2005) as users and those who are members of our information-sharing scheme can avail our services. Our information-sharing scheme is strictly regulated by the Reserve Bank of India as per the CICRA 2005. There are strict rules governing the ways in which lenders can access and use the data we hold about consumers.<br><br><strong>How much does a credit report help an individual while applying for a loan?</strong><br>As your credit history plays a key role in your ability to obtain credit and on what terms, it is important to understand the information that is shared by lenders with a credit information company, such as Experian. By understanding your credit history it enables you to take control of your financial situation, make informed financial decisions and also helps to protect yourself from identity theft.<br><br><strong>What does Experian Services do?</strong><br>Experian's products and services help businesses in customer acquisition, customer management, fraud management, risk management and debt recovery. These are grouped under four principle business lines: Credit Services, Decision Analytics, Marketing Services and Interactive Services. Experian Credit information Company of India Private Ltd is the 16th Credit Bureau operated by Experian. It will provide credit information services to lenders and consumers. We are in the process of acquiring 3 more credit bureaus in Latin America and setting up one more credit bureau in Australia.<br><br>Experian Credit Information Company of India is a joint venture with 7 banks and NBFCs such as Axis Bank, Punjab National Bank, Union Bank of India, Indian Bank, Federal Bank, Sundaram Finance and Magma Fincorp for providing credit information services.&nbsp; Experian Plc is the single largest shareholder in the company. In addition to providing credit information reports to lending institutions which are members of the Experian Credit Information Company and to individual consumers, we have also launched various value-added services which allows Indian lending institutions to unlock greater customer insight. Experian's customer management products such as Triggers, Account Review, Premier Attributes, CIR+, etc. are used by many leading banks and NBFCs around the world to deploy customer level strategies across the organisation; increasing customer value and account revenue whilst reducing operational costs, credit losses and customer attrition.<br><br><strong>What does a product like Triggers do?</strong><br>Experian Triggers™ is India's first daily notification service which provides Indian banks and NFBCs with information about consumer credit activity. By providing automated notifications about changes to a customers' financial situation, Experian Triggers helps banks and NBFCs take immediate steps to minimise bad debt.<br><br>Triggers was launched in June 2011 with Axis Bank and Fullerton as our early adopters. Since then we have added more banks to the list. <br><br><strong>When did Experian come to India?</strong><br>Experian Services India has been providing decision analytics services and products in India since 2007. Our renowned global experts provide consultancy on all aspects of risk management and work with customers to determine the most optimal strategies to deliver tangible improvements in credit and operational risk practice. Connect+ is an industry standard gateway that helps connect bank's internal systems with multiple credit bureaus and other information sources providing actionable intelligence. Recently HSBC signed an enterprise wide deal to use Connect+ to further standardize its third party data access around the world. Hunter is the application fraud detection and prevention solution which helps users go beyond conventional scoring and underwriting techniques to identify fraudulent applications early in the origination process. Currently, Axis Bank and ICICI Bank are using Hunter in the local mode. We have also launched Strategy Manager which will help banks and NBFCs to treat every customer as an individual and make the right business decisions which will enable them to protect their customer base. Tallyman is a product which helps our customers manage their collections process end to end.<br><br>In 2010, Experian launched its Indian marketing services business. It products and services provide actionable competitive intelligence to its customers and enables them to identify, target and acquire customers. Experian CheetahMail is the trusted service provider of email marketing for top enterprises worldwide. In India, CheetahMail is being used by Kingfisher Airlines, Lemon Tree Hotels, MakeMyTrip among others.<br><br><strong>You recently launched Hunter. What does Hunter do?</strong><br>The best strategy to prevent fraud is to detect it at the application stage before a customer is accepted. Experian National Hunter brings in global best practices in fraud based on Decision Analytics experiences, in terms of fraud techniques and trends, and mechanisms to identify/manage them. Globally, Hunter has been able to provide billions of dollars of fraud savings to more than 100 major institutions.<br><br>Combining a rules-driven business engine with intuitive investigative tools, National Hunter creates a continuous cycle of fraud prevention and detection. The system can be used for all types of loan applications&nbsp; and fraud identification across multiple loan types and channels.&nbsp; <br><br>Hunter operates on two levels - Local and National. Local Hunter is when the service checks for inconsistencies and past records within the bank across branches. National Hunter is when the service checks for inconsistencies and past records not just within the bank but across banks which have signed up to be members of the Closed User Group. India's Top Three private sector banks - Axis Bank, HDFC Bank and ICICI Bank are already using the service.<br><br><strong>How can an individual access his credit report from Experian?</strong><br>As per CIRCA 2005, every individual has the right to seek his or her credit information report from the credit information companies. At Experian, we have made it easy for the consumers to access their credit information.<br><br>An individual simply needs to apply to us and request for the application form to be sent to him. A duly signed form along with identity proof, address proof and a fee of rupees 138 is all one needs to send to us. After validating the information provided by you with the latest records provided by our members and as maintained by us and after authenticating your identity and confirming your address we will dispatch your Experian Credit Information Report within 20 business days.<br><br><strong>Does Experian provide an individual credit score? Can a retail customer have access to his score? How?</strong><br>Currently, we provide only a credit information report to the individual consumers. We do provide a bureau score to the member banks and NBFCs but not to the consumers.<br><br><strong>Not many individuals are aware of credit reports and score. How do you think this issue can be tackled?</strong><br>Retail loan is still in its early days of growth in India and hence it is natural that not many will be aware of credit information reports or credit scores. At Experian we believe that an informed and aware consumer is always good for the overall health of the banking industry. This leads to responsible borrowing by the consumers resulting in lesser defaults and delinquencies. Thus we have invested in creating consumer education programs which educates individual consumers about credit, credit histories and credit management. <br><br>We conduct seminar to educate the consumers at various places and through various forums. We have created literature to help consumers understand the importance of credit management at various life events such as moving homes, bereavement, illness, getting married, etc&nbsp; to enable them to take control of their financial situation.<br><br><strong>What does one need to do to maintain a healthy credit history and why is it important to do so?</strong><br>When you apply for a loan, banks have to make sure that you are who you say you are and that you are likely to repay the loan. They will look at the information in your application and will check your credit report from a Credit information Companies (CIC). Banks and NBFC's provide a record of your loan and credit card repayments to a CIC such as Experian. A CIC is an independent organisation that compiles public data, identity information, credit transactions and payment histories of consumers.&nbsp; <br><br>Our Credit Report contains identity information, past and present credit obligations, previous addresses and enquiries made by banks for all your loan applications. If your report shows that you repay credit on time, this will usually help you get credit at favorable terms. Thus it is important to maintain a good credit history.<br><br>There are a number of things that you can do to improve your credit profile and thereby your chances of getting credit: always make your payments on time. If you cannot do this, contact the lender as soon as possible to discuss what options are available to you, it is always better to speak to your lender immediately if you are experiencing any difficulties in maintaining your payments; If you have paid off a debt but your report doesn't show this, contact the organisation concerned and ask them to make the necessary changes or contact us and we will contact the relevant organisation for you. Close any accounts you no longer use; Check your credit information report regularly. It always makes sense to get a copy of your credit information report before you apply for credit or if you are refused credit as a result of information held by a credit information company.<br><br>tanushree(dot)pillai(at)abp(dot)in</p>