Experian Credit Score: Meaning, Benefits, Importance & How to Check
Credit scores determine your eligibility for loans and other credit products. India has four primary credit bureaus: CIBIL, Experian, Equifax, and CRIF High Mark. When we talk about the Experian credit score, this is your score calculated by Experian, the credit reporting company. While credit scores from all reporting companies are equally valid, financial institutions prefer scores from certain bureaus to assess applicants’ creditworthiness.
The following sections focus on Experian credit score meaning, benefits, importance, and how to check.
What is Experian Credit Score?
Experian credit score is a 3-digit number ranging from 300 to 850. The credit reporting company calculates it using your repayment history, credit usage, loan applications, debt obligations, etc. Experian started in India as a multinational credit reporting company in 2010. It became one of the four credit reporting agencies licensed in India by the Reserve Bank of India.
Whenever you borrow a credit product, the provider sends the credit bureau data about your repayment and credit behaviour. The bureau interprets this data and calculates your Experian CIBIL score to create your credit report. A decent credit score improves your chances of receiving credit at reasonable rates with favourable terms and conditions.
What is a Good Experian Credit Score?
The Experian credit score range starts from 300 and goes up to 850. The higher, the better. If you ask what is a good credit score for Experian, a score above 670-700 is good enough to indicate ample creditworthiness and repayment capacity. Let’s look at the Experian credit score India ranges:
Score | Category | Implication | Risk for Lenders |
|---|---|---|---|
NA/NH | No Score | No credit history | High |
300–579 | Poor credit | Poor financial management, credit utilisation, and payment defaults | High |
580–669 | Fair credit | Few instances of payment defaults, liable to default | Medium |
670–739 | Good credit | Balanced credit history, sound financial decisions, timely repayments | Low |
740–799 | Very good credit | Good financial management and utilisation, regular repayment, no defaults | Low |
800–850 | Excellent credit | Perfect credit record, chances to get the best loan deals | Low |
Also Read: What is a Credit Score - Meaning, Importants and Its Calculation
Factors that Affect Experian Score
Below are some important factors impacting your Experian credit score in India:
Factor | Impact Percentage | Meaning |
|---|---|---|
Payment History | 35% | One of the most significant factors reflecting whether you pay your loan EMIs and credit card bills on time. Defaults, late payments, bankruptcies and other negative data reduce your credit score. |
Credit Utilisation | 30% | Consider the percentage of your credit card balance to the available credit limit. A high credit card balance impacts your score negatively. |
Length of Credit History | 15% | The duration for which you have established your credit accounts. The longer the history, the higher the credit score. |
Credit Mix | 10% | Indicates the types of credit accounts in your portfolio. Handling different types showcases your credit management skills and sense of financial responsibility. |
Recent Credit Activity | 10% | Opening several new credit accounts within a short period is risky behaviour. |
How to Check your Experian Credit Score?
Checking your credit score at regular intervals is important as it lets you know where you stand. You must understand what Experian credit score is for your position, especially if you plan to apply for a Personal Loan or another credit product soon. It helps you plan your loan application better. You can check your Experian credit score online and offline. Here is how to do that:
Steps to Check Experian Credit Report and Score Online
Follow these steps to check your Experian CIBIL score online:
Step 1 | Visit Experian official website > click "Free Credit Report." |
Step 2 | Enter the necessary details to log in, including your name, email address, and mobile number. |
Step 3 | Enter the OTP received on your mobile number > click "Get Credit Report." |
Step 4 | Verify your identity using your residential address, date of birth, and a government-approved ID card number, like voter ID, PAN card, driving license, or passport. |
Step 5 | After verifying the information, answer further questions about your credit history. |
Step 6 | A new page will open where you can see your credit score. |
Step 7 | From here, you can download your Experian credit report containing your score. |
Steps to Check Experian Credit Report and Score Offline
The Experian credit score check process is similar to the steps you use to check your CIBIL score offline. These are the steps to follow:
Step 1 | Visit the Experian website > download the Credit Report form |
Step 2 | Fill in the necessary details and sign it |
Step 3 | Add self-attested copies of your identity proof, such as your PAN card, voter ID, and passport. |
Step 4 | Add self-attested copies of your address proof, such as your electricity bill, telephone bill, rent agreement, deed of purchase, or bank account statement |
Step 5 | Pay the required fee through NEFT or demand draft |
Step 6 | Send the filled form with the required documents to the following address: Experian Credit Information Company India Pvt. Ltd. Consumer Services Equinox Business Park Tower 3, 5th Floor, East Wing LBS Marg, Kurla (West) Mumbai 400070 |
Step 7 | You will receive your credit report via mail |
Also Read: CIBIL Score Range: Know Whether Your CIBIL Score Is Good or Bad
Tips to Improve a Good Experian Credit Score
Here are a few tips to improve your Experian credit score:
| Timely Payments | To boost your credit score, consistently pay your loan EMIs and credit card bills. Activate automatic payments or set reminders to avoid missing the due dates. |
| Credit Utilisation | Maintain a low credit utilisation ratio to demonstrate efficient credit management. |
| Avoid Over-Borrowing | Applying for several credit products within a short period signifies financial distress. So, avoid over-borrowing. |
| Retain Old Credit Accounts | Closing old credit accounts can harm your credit score. Keep them active to show a lengthy credit history. |
| Diversify | Maintain a diverse mix of credit products to demonstrate your capability to handle them responsibly. |
| Monitor | Review your credit report regularly to spot any errors in time and get them rectified immediately. |
Difference Between Experian Credit Score and CIBIL Credit Score
Both Experian and CIBIL are reputable credit scores that most lending institutions respect. However, a big difference between the Experian credit score vs CIBIL lies in the fact that Experian collects data from various sources, including financial institutions, banks, credit card companies, etc. However, CIBIL gathers data from its member institutions, including banks and financial institutions. Besides that, Experian uses the FICO scoring model, while CIBIL uses a model specific to the financial environment of India. Last but not least, the Experian credit score ranges from 300 to 850, while the CIBIL score ranges from 300 to 900.
Also Read: Experian Vs CIBIL: What are the Definition, Meaning & Differences?
Conclusion
A strong Experian credit score is necessary to maintain sound financial health. Regularly checking your credit score keeps you informed about your credibility and work towards improving it.
If you are planning to apply for a Personal Loan and have a low Experian score, choose Hero FinCorp. Hero FinCorp has no minimum credit score requirement to apply for a Personal Loan. Here, you can borrow a Rs 50,000 personal loan to Rs 5 Lakh personal loan at competitive interest rates.
Frequently Asked Questions
1. What is a good credit score in Experian?
An Experian credit score above 670 is good enough for creditors to determine your creditworthiness.
2. Is Experian credit score the same as CIBIL?
Experian and CIBIL are two different credit reporting agencies operational in India. Both have different scoring models and their scores may also differ from each other.
3. Is Experian your real credit score?
Experian is your real credit score if you have sourced it from the right place.
4. What does the credit score on Experian mean?
The credit score on Experian indicates your credit history, diversity, and length, signifying your past credit behaviour.
5. Is Experian credit score valid?
Lending institutions prefer credit scores from different credit bureaus. Check your lender’s preferred credit score before applying.