New Delhi, May 8 -- A credit bureau is an independent agency that collects, maintains, and analyses the credit information of individuals and businesses. It compiles data from various financial institutions, including banks, NBFCs, and credit card companies, to create detailed credit reports. These reports include information such as past loans, repayment history, outstanding dues, credit card usage, and defaults. Based on this data, the bureau generates a credit score-a three-digit number that reflects the creditworthiness of the borrower. Lenders use this score to assess the risk of lending, helping them make informed decisions on loan approvals, interest rates, and credit limits.

"As India's financial ecosystem expands, especially int...