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Experian Credit Score & Experian Credit Report

  • Marisha Bhatt
  • Oct 05 2021
  • 8 minutes
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What is an Experian credit score?

When we apply for a loan or a credit card, having a good income level and a sound repayment capacity is not enough. Applicants also have to consider their credit score as it is an important piece of information reviewed by the lender. Experian is one of the credit rating agencies available in India that provides the Experian credit report and score of a person or an organization. The credit score issued by Experian is a three digit number that is issued based on the past credit information of a person. This credit score is a crucial reference point reviewed by the lenders (banks, NBFCs, etc.) 

If the credit score of an applicant is low then the possibility of them getting a loan or a credit card is reduced. Even if they get the sanction of any loan or credit card the rate of interest may be higher or the loan amount will not be as requested by the applicant. Hence, maintaining a healthy credit score is quite essential.

What is an Experian Credit Report?

As mentioned above, Experian is one of the many certified credit rating agencies in India that are charged with providing the credit scores and credit report for a person or business entity like company, firm, sole proprietary, etc. 

While credit score is a number issued by the agency based on the past credit information of the applicant, an Experian credit report is a detailed history of all the credit transactions of the applicant. This includes any loan or credit card application made and rejected, the repayment history of the applicant for any approved loans and credit cards, any default or delays in the repayment of EMIs or credit card dues, any hard enquiries made by lenders, etc. 

What is the need for an Experian credit report?

Experian credit report is the compiled information of the credit applied and availed by a person or a business entity. This information is provided by the member lenders usually on a monthly basis. This information is then updated in the credit report of the concerned applicant and is kept on record for a period of 7 years. The information is then accessed by the lenders while considering a loan application or a credit card application.

The importance of the credit Experian credit report can be understood by the following factors.

  1. A favourable credit report will help the applicant get easy access to a timely credit facility at a relatively lower interest cost
  2. The applicant can check their credit report to know their credit standing and make informed decisions while making a loan application or a credit card application.
  3. The applicants can check their credit report and their credit scores and take measures to improve the same if needed to ensure that their future prospects of getting a good credit facility are not damaged. 

What is the information available in an Experian credit report?

The Experian credit report consists of the information related to the applicant that is categorized in many parts. The components of the credit report are mentioned below.

The credit score of the applicant

The Experian credit score is a three-digit number ranging between 300 to 900. A credit score closer to 900 implies that the applicant has a favourable credit history and a credit score closer to 300 implies an unfavourable credit history. A person with a higher credit score will be preferred by the lender for the issue of a loan or a credit card as they are considered to be low risk for any default or delays in repayment of the credit extended. Lenders usually require the applicant to have a minimum credit score of 750 to be eligible for any loan or credit card.

The personal information of the applicant

The personal information of the applicant is another crucial component of the Experian Credit Report. This portion includes basic KYC details like,

  1. Name of the applicant
  2. Address of the applicant
  3. Gender of the applicant
  4. Contact information of the applicant (telephone number, mobile number, etc.)
  5. Employment information of the applicant

The employment information of the applicant is also included in the Experian Credit report. This information is related to the current employment, annual, or monthly income of the applicant as reported by the member lenders based on the application made. 

Account information of the applicant

The account information of the applicant relates to the details of the credit availed by the applicant in the past. It includes information like 

  1. Type of credit availed
  2. The account numbers
  3. The current balance of the applicant
  4. The repayment for the credit and defaults or delays if any
  5. Enquiry information by lenders

This portion includes the hard enquiries made by member lenders regarding the credit information of the applicant while considering a loan application or a credit card application. It includes the enquiries related to the loan application or the credit card applications. 

How to get Experian credit report?

As per the revised mandate of RBI, a person is entitled to get their free credit scores and free credit report at least once from all the certified credit rating agencies. The applicants will have to make an application with Experian from their registered email id for the same. Applicants can also get access to monthly, quarterly, half-yearly, or annual credit reports by making a subscription for the same. The cost for such a subscription is nominal to the tune of Rs. 399 excluding taxes and can be paid through a credit card or a debit card or through the net banking facility. 

What are the factors affecting the Experian credit score?

There are several factors that impact the calculation of the Experian Credit Score. Some of these factors are detailed below.

  1. The type or the nature of credit taken by the applicant
  2. The history of repayments made by the applicant
  3. The duration of the account held by the applicant
  4. Credit usage or credit utilization ratio of the applicant
  5. The number of enquiries made by the lenders for the credit cards or loans applied by the applicant

Conclusion

The Experian Credit Report and Credit score is an important aspect considered by lenders while making the decision to sanction a loan application or a credit card application. A favourable credit report will ensure that the applicant can get access to a higher credit facility at a relatively lower interest cost and vice versa. 

FAQs

What is the difference between an Experian credit score and an Experian credit report?

 Experian Credit score is the three-digit score allotted to a person or organization based on their credit history. Experian credit report on the other hand is the detailed record of the credit history of a person or business organization for a period of the past 3 years.

How can a person improve their credit score?

There are many ways that can be used to improve the credit score of any person. Some of such ways are mentioned below.
a. Making timely payment of EMIs for all kinds of loans and credit card dues
b. Ensuring that the credit utilization ratio is kept in check by using the credit cards in moderation
c. Ensuring that the past dues are cleared in full at the earliest.
d. Avoiding the possession of multiple credit cards or applying for multiple loans
e. Another important factor is the payment of any outstanding amount on credit cards in full. This will help the applicants avoid getting into a credit card debt trap.
f. It is also important to avoid the withdrawal of cash through a credit card as it can negatively impact the credit score.
g. The applicant needs to intimate the credit rating agencies of the closure of the loan once it is fully repaid. 
h. The applicant should also get all the closure documents from the lender (No Due Certificate (NDC), statement of account(s), and original documents submitted) at the time of closure of the loan.

What is the minimum credit score for any loan or credit card?

The minimum credit score required for any loan or credit card is 750

Can a person get a free Experian credit report?

Yes. The credit bureaus also provide free credit scores and credit reports once a year to the applicants. The applicant will have to make a formal request for the same with the credit rating agency

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