In layman's terms, a credit bureau is an organisation that collects information on a person's credit, such as borrowings, bill payments, pending debts, and so on. This information may subsequently be shared with credit information companies, which follow the protocol of evaluating an individual's credit statement and reports for loan approval, credit card approval, and so on.
Let’s first understand what is a loan? The loan is basically borrowed money. Lenders such as banks and other organizations usually provide a fixed amount of money known as principal amount to the borrowers.