Tuesday, 30 May 2017

Is the free credit score in India really free?

Indians are fan of the word “free”.  We can see number of buyers increasing at the outlets when on promotions like buy one get one free. The marketers keep using the psychological impact of the word through free trial, join free etc to attract the buyers. But what is getting missed out at the front of free credit score is something which is noteworthy. 
In its latest diktat to the credit bureaus, the Reserve Bank of India has mandated extension of a credit report to all consumers free of cost. It means that any individual can approach CIBIL or any of the other three bureaus viz. Equifax, Experian or Crif Highmark and obtain free credit report. While obtaining free credit score can be a great tool for consumers to understand their credit profile, it actually is not as freely available as the paid report being extended by the bureaus.
How does obtaining a free credit score help?
Let us first understand how obtaining free CIBIL score would actually help the consumers. A credit score is three digit expression of the credit profile of an individual. It is indicative of the associated risk on lending to that individual. Meaning how likely is it for the individual to default over a period of time. This numerical expression is an outcome of various parameters and these parameters are based on the data available on the report.
Obtaining the report and score will help the individual to understand the status and more importantly, check on inconsistencies or errors that can jeopardize the credit profile and take corrective action.
Since one of four reports in India is feared to have errors, it becomes so much more important for one to keep checking report regularly and a free credit report will help in meeting this objective.
How free is a free credit score in India?
While the bureaus have implemented the mandate, the free report is not as easily available as the paid report.
CIBIL provides with a completely automated process where the individual can obtain the report in just a few clicks. All that is required from one is keying in correct data on personal information and authentication queries.
Obtaining a free report from Equifax would entail downloading the application on your mobile. There after not only will you be required to carry out an Adhaar based authentication but would also be required to validate on authentication. Once the authentication is successful, you will receive the report in 24 hours on your mobile.
Experian follows a completely different process where one is required to fill up the mandatory details like name, email id, identification number etc. Upon successful submission of the form, Experian will send the voucher code for free credit report in 48 hours on the registered email id. On receipt of the voucher code, one is required to authenticate himself. Upon successful authentication, the report shall be mailed on the registered email id.
Obtaining a free credit report from Crif Highmark again is at least a two day process. One first needs to fill in the basic form. Post verification of details Highmark would send out a mail to the individual within 48 hours that would require one to click on the link and authenticate himself with by answering a few verification questions based on the credit history. Once the authentication is successful the free report will be received via email.

The process on obtaining free report is so complex, that one may just give up or end up paying with an intention to speed up the receipt of the report. It is for the Reserve Bank of India to ensure that the free credit report and free credit score is available freely. 

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