Global Scenario of Credit Bureau

The World Bank has supported the development of credit reporting systems around the world for more than decades. The International Finance Corporation’s Credit Bureau Knowledge Guide (IFC 2006) provides an overview of experiences in developing the capabilities of private credit reporting institutions through public private partnerships and institutional innovation. The World Bank’s General Principles for Credit Reporting (2011) reviews best practices and makes policy recommendations for developing credit reporting systems. Globally Equifax is the first credit bureau of the world which was earlier called as Retail Credit Company and the first credit score was launched by Fair, Isaac and Company known as FICO Score. All the lenders or creditors and other Credit Bureaus generally follow this FICO Scoring Model. Beside this, the vantage score is also used in the world. Though there are many credit bureaus in the world but the three main bureaus that are globally recognized are Transunion, Equifax and Experian.  Every country has their own norms and policies and their own regulatory bodies to regulate Credit Bureaus in their country. Credit bureaus are an important part of any country’s economy that the system can help to mitigate a number of market failures around the world. The availability of high quality information can reduce problems of adverse selection and asymmetric information.

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