In the United States, credit is a way of life, as the majority of adults use credit cards for their expenses and build credit scores. They can either improve it or make it bad. There are even niche financing options that show how Americans use credit for nearly everything, big and small.
India, by contrast, has only recently entered a credit era. Historically, Indians were cautious about debt, but that is changing fast. India now has its credit score system and bureaus, and an increasing number of Indians use credit cards and loans. Today, we’ll explain how credit scores work in the US versus India.
United States
In the United States, one of the most popular facts about credit score is that it is dominated by the FICO Score, a model developed by the Fair Isaac Corporation in 1989. FICO scores go from 300 to 850 — the higher your score, the better your credit. The model analyzes data from your credit reports maintained by Experian, Equifax, and TransUnion. These bureaus collect information on your loans, credit cards, payment history, and more.
FICO scores consider your payment record, total debt, credit age, new applications, and account variety. Of these, payment history and credit use matter most. FICO is used by 90% of U.S. lenders when making credit decisions.
Alongside FICO, the U.S. also has VantageScore, a newer scoring model developed jointly by the credit bureaus. VantageScore also has a 300–850 range and similar data, but with its proprietary weighting. While FICO remains the gold standard, VantageScore has grown in use for free credit score services and some lending decisions.
India
India’s credit score system has emerged more recently and uses its own bureaus. The concept is similar: a three-digit score indicating credit health, but the score range in India is 300 to 900, not 850. A higher number is better, and a score above 750 is typically considered strong. The most famous credit score in India is the CIBIL score, named after TransUnion CIBIL, which was the country’s first credit bureau and remains the leading agency today.
India has four main credit bureaus licensed by the Reserve Bank of India: TransUnion CIBIL, Experian India, Equifax India, and CRIF High Mark. Each bureau collects data about consumers’ loans and credit cards from banks, lenders, and non-bank financial companies, and each can issue its own score.
The difference between India and the US is that many people still have a thin or nonexistent credit file. Only about 5.5% of Indians have a credit card in 2025, compared to the majority of adults in America. However, this is changing, as the number of active credit cards in India doubled from 55 million in 2019 to 100 million in 2024, and younger generations are more comfortable using credit.
- Pay on time, every time. Your payment history is the single biggest component of your credit score, wherever you are. Paying every bill on time builds a solid payment record.
- Keep balances low. It is also a major factor. A common guideline is to maintain your perfect credit score by keeping your balances below about 30% of your credit limit or even lower.
- Build a lengthy credit history. Keeping older credit card accounts open can help increase the average age of your accounts. Avoid closing your oldest credit accounts unless there’s a good reason.
- Check your reports. In the U.S., you’re entitled to a free annual report from each major bureau via AnnualCreditReport.com. In India, each bureau must also provide one free credit report per year to consumers, per RBI guidelines.
Mistakes That Hurt Your Credit Score
However, even a few small missteps can quickly damage your credit reputation:
- Late or missed payments. They have a negative impact. In the U.S., a payment that’s over 30 days late is reported to the bureaus and stays on your credit report for up to7 years. In India, any delinquency will be noted in your credit history and pull down your score.
- Defaulting on loans or cards. If you stop paying a loan or credit card altogether, it eventually goes into default and is often sent to a collection agency. This is very damaging to your credit score. Such accounts signal that the lender had to write off the debt, a big red flag for future lenders.
- Using too much of your credit limit. Continuously high credit utilization can drag your score down. If you regularly max out your credit cards or keep balances close to the limit, it indicates potential overextension. Credit scoring models interpret this as a potential default risk.
- Too many credit applications in a short time. Each time you apply for a loan or credit card and the lender conducts a hard inquiry, it can shave a few points off your score temporarily. Multiple inquiries in a short period make you look riskier, as it appears you’re urgently seeking credit.
Do Other Countries Have Credit Scores?
What about the rest of the world? Credit ratings are not international or universal, but most other countries do have credit scores. Each country tends to have its own system, or sometimes none at all. There is no single global credit score that you carry with you. For instance, Canada closely mirrors the U.S. system, with Equifax and TransUnion, and scores from 300 to 900. The U.K. has credit “reference agencies” like Experian, Equifax, and TransUnion as well, but each uses different scales.
Germany uses a system called SCHUFA, which scores people between 0 and 100, and Australia has scores ranging between 0–1200 under a Comprehensive Credit Reporting system. At the same time, some countries don’t have a formal credit score for individuals at all; for example, Japan doesn’t have a nationwide credit scoring system like FICO, and lenders there rely on their assessments of a borrower’s finances. Because of this, people who migrate have to establish credit anew in the new country.
- Open a U.S. bank account first. It’s your base for bills, paychecks, and transfers. Then get a starter credit line. The simplest option is a secured credit card: you put down a cash deposit, and the bank gives you a card with a matching limit. Use it for small purchases and pay in full each month to start building credit.
- Consider an international credit transfer. Check if there are services that recognize your foreign credit history. A company called Nova Credit has partnerships with certain U.S. credit card issuers, and they can use your Indian credit record to qualify you for an American credit card.
- Get added as an authorized user or get a co-signer. If you have a family member in the U.S. or a close friend with good credit, another shortcut is to be added as an authorized user on one of their credit cards. Their card issuer will start reporting that account on your credit report, giving you some positive history.
After you open an account, get a starter card, and consider an authorized user/co-signer path, learn how U.S. statement timing, utilization, and hard inquiries affect scores. If your score dips, learn how to recover from a credit score drop to understand what typical costs, repayment timelines, and issuer-specific rules exist in the US.
- Establish banking and get a basic credit line. If you are new to India’s financial system or returning after a long time, start by (re)opening an Indian bank account. Some banks offer secured credit cards against a fixed deposit.
- Leverage any existing credit record you might have. If you lived in India before and had any loans or cards, check your old accounts. Make sure you don’t have any unpaid dues. Clear up any such legacy issues.
- Obtain a credit report and know your starting point. As an individual in India (resident or NRI), you have the right to get a free credit report and score from each bureau once a year. Request your report from TransUnion CIBIL or Experian India to see what’s on it. You will need an Indian mobile number to complete the verification and get the report online.
What Will Be Next?
Both systems are moving toward more complex, real-time assessments. In the U.S., expect wider use of trended data, rent and utility reporting, and cash-flow analytics across new FICO and VantageScore versions. India will likely scale its Account Aggregator framework and expand reporting from banks and NBFCs, helping thin-file borrowers build history faster. For consumers, the edge is simple: automate on-time payments, keep utilization low, monitor reports, and add positive alternative data where available to stay rate-ready in both markets.