The Most Popular Credit Rating Agencies in India

A credit rating agency is equipped with all the required information to rate an entity (maybe an individual or an organization) based on its creditworthiness. These agencies provide highly essential risk assessment reports and analytical solutions and assign a definitive credit score to both individuals as well as organizations. This credit score reports are considered highly important for getting the loan. Not only the credit score but also certain documents are also needed for getting the loan. Read the article ” Documents required for the most applied loans of India”  to know more about the documents required for different types of loans.

Now, let us have a look at the top most credit agencies of India placed in no particular order.

CIBIL – Credit Information Bureau India Limited

Year of Establishment 2000
Headquarters Mumbai, India
Main Objective The main function of CIBIL is to track the credit history of an individual or a company and rate their creditworthiness.
Benefit The CIBIL scores are used by lending organizations to sanction loans quickly and for the approval of credit cards too.
Rating scale Ratings vary between 350 and 900. Generally, a rating of above 700 is considered favorable. A high credit score allows consumers to avail all types of loans easily and at good interest rates.

To know about CIBIL Score Ratings, read this article “Understanding the CIBIL Score System“.

CRISIL – Credit Rating Information Services of India (Limited)

Year of Establishment 1987
Headquarters Gurgaon, India
Main Objective The main function of CRISIL is to establish the creditworthiness of companies based on the business strengths, the board, the market share, and reputation of the company and so on.  CRISIL rates organization like public limited companies, banks and financial organizations and not individuals.
Benefit Allows investors to obtain a clear idea about an organization before investing in their debentures and bonds.
Rating scale CRISIL offers 8 different grades credit scoring. They are,
1. CRISIL AAA, CRISIL AA, CRISIL A – The three grades offer maximum safety for timely servicing of the loans.
2. CRISIL BBB, CRISIL BB – Offer moderate safety.
3. CRISIL B, CRISIL C, CRISIL D – High-risk individuals

ICRA – Investment Information and Credit Rating Agency of India

Year of Establishment 1991
Headquarters Mumbai, India
Main Objective ICRA offers 12 types of ratings which include, Corporate debt rating, Financial sector rating, Issuer rating, Bank loan credit rating, Public finance rating, Corporate governance rating, Structured finance rating, SME rating, Mutual fund rating, Infrastructure sector rating, Project finance rating and Insurance sector rating,
Benefit Comprehensive ratings offered through a transparent rating system.
Rating scale The ICRA rating system includes symbols that represent the ability of a corporate entity to service its debt obligations in a timely manner. The rating symbols vary with the financial instruments considered.

CARE – Credit Analysis & Research Limited

Year of Establishment 1993
Headquarters Mumbai, India
Main Objective Offers a complete range of credit rating services that helps investors to make informed decisions and companies to raise capital. The company offers its credit rating and grading services in the following areas: Debt ratings, Bank loan ratings, Issuer ratings, Corporate governance, Recovery ratings, Financial sector, and Infrastructure ratings.
Benefit All services adhere to international quality standards thus ensuring maximum reliability.
Rating scale CARE offers two different categories of bank loan ratings, one for long-term debt instruments and the other for short-term debt instruments.
1. The short-term debt ratings are as follows and mentioned in the descending order of safety level for servicing loans appropriately.
CARE AAA, CARE AA, CARE A, CARE BBB, CARE BB, CARE B, CARE C, CARE D.
2. The long-term debt ratings are as follows and mentioned in the descending order of safety level for servicing loans appropriately.
CARE A1, CARE A2, CARE A3, CARE A4 and CARE D.

ONICRA – Onida Individual Credit Rating Agency of India

Year of Establishment 1993
Headquarters Mumbai, India
Main Objective ONICRA credit assessment and scoring services for both individuals and businesses and is also a reliable employee background screening company. ONICRA also offers risk assessment reports and analytical solutions for individuals, MSME’s as well as for well-established corporate organizations.  ONICRA grades the players in the education, healthcare and solar industries and provides a detailed assessment of each of the APMC.
Benefit Offers a holistic view of an individual or an entity and thus allows lenders and service providers to make value-based decisions.
Ratings Credit ratings for MSME’s are based on two factors: financial strength and performance capability.

SMERA – SME Rating Agency of India Limited

Year of Establishment 2005
Headquarters Mumbai, India
Main Objective SMERA compromises of two main divisions: SMERA Bond Ratings and SMERA SME Ratings. The first division was started in 2011 and is responsible for the credit assessment of issuers of bonds, debentures and fixed deposits. The SME rating division of SMERA rates MSME’s, all types of bank facilities, renewable energy and services companies, micro-finance institutions and other vendors.
Benefit Accredited by the RBI, SMERA is home to a strong team of finance professionals.  It is a body of trust and excellence that helps the different entities to control risk efficiently
Ratings The bank loan ratings offered by SMERA can be summarised as AAA – Highest Safety, Lowest Credit Risk
AA   – Highest Safety, Very Low Credit Risk
A      – High Safety, Low Credit Risk
BBB – Moderate Safety, Moderate Credit Risk
BB   – Moderate Risk, Moderate Risk of Default
B      – High Risk, High Risk of Default
C      – Very High Risk, Very High Risk of Default
D      – Default / Expected to be in Default soon
All ratings are preceded by “SMERA”.

Brickwork Ratings India Private Limited

Year of Establishment 2007
Headquarters Bangalore, India
Main Objective Brickwork Ratings takes up the responsibility of rating bank loans, municipal corporation, capital market instrument, financial institutions, SME’s and corporate governance ratings. It also grades initial public issue by a company and is one of the very few credit agencies that play a significant role in the grading of real estate investments, hospitals, educational institutions, tourism, NGOs, IREDA, MFI and MNRE.
Benefit Organizations rated higher by this SEBI registered credit agency can easily negotiate lower interest rates and enjoy higher valuations. The ratings and grade services offered by Brickwork help the investor to obtain relevant information in totality.
Ratings Brickwork Ratings rates the different financial instruments using its signature rating scale that starts with “BW” and is followed by unique rating symbols.

Equifax India (Equifax Credit Information Services Private Limited, ECIS)

Year of Establishment 2010
Headquarters Mumbai, India
Main Objective Equifax India is a subsidiary of Equifax US and was formed a joint venture between the parent company and seven prime financial institutions in India (UBI, SBI, Bank of Baroda, Bank of India, Kotak Mahindra, Sundaram Finance and Religare). Equifax India collects and processes financial information from all members and offers a whole range of credit assessment reports for individual consumers. The different types of reports provided by Equifax include Basic or Enhanced consumer information report, Equifax alerts and Microfinance institution credit information.
Benefit Consumer credit information establishes the creditworthiness of the individual and allows easy processing of loans by the bank and other financial institutions.
Ratings The Equifax Credit Score carries a numerical range between 280 and 850. The credit score can be defined as follows,
a) Above 800 – Excellent. Highest safety.
b) Between 750 and 800 – Very Good. High safety.
c) Between 700 and 750 – Good. High Safety.
d) Between 650 and 700 – Very Fair. Moderate Risk.
e) Between 600 and 650 – Poor. High Risk.
f) Lesser than 600 – Highest Risk.

Experian India

Year of Establishment 2006
Headquarters Mumbai, India
Main Objective Experian India consists of two companies, Experian Credit Information Company of India Private Limited (provides credit information) and Experian Services India Private Limited (provides relevant data for organizations to minimize risk and maximize revenue)
Benefit Experian India is equipped with outstanding analytical tools and data resources that make is an important entity of consumer economy in the country.
Ratings The Experian Credit Score carries a numerical range between 330 and 830.
The credit score can be defined as follows,
a) Above 800 – Excellent. Highest safety.
b) Between 750 and 800 – Very Good. High safety.
c) Between 700 and 750 – Good. High Safety.
d) Between 650 and 700 – Very Fair. Moderate Risk.
e) Between 600 and 650 – Poor. High Risk.
f) Lesser than 600 – Highest Risk.

Every credit rating agency has its unique approach to adding more value to the business world. These agencies play a critical role in determining one’s investment portfolio and facilitate the easier transaction of loans and credit cards. In short, credit rating agencies in India play a significant role in the overall economy of the country.

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