Credit reports for individuals, the personal equivalent of credit rating for firms, are catching on in India, signalling that the nation's borrowers are developing a habit of tracking their financial health for loans.
Credit bureaux in India saw a rise of up to 200% in the number of people buying credit reports in 2012 over the previous year, according to industry data. The growth figure varies from company to company, but the number at least doubled. Though firms in the business are not sharing absolute numbers, industry officials said overall about 500,000 people bought credit reports last year.
India's largest credit bureau CIBIL (Credit Information Bureau of India Ltd) has seen a 100-150% in the number of people buying credit reports, said Harshala Chandorkar, its senior vice-president.
"A CIBIL survey recently found that 60-70% consumers are buying reports before applying for loan," Chandorkar said.
Besides CIBIL, there are three other credit bureaux in India - Equifax Credit Information Services, Experian Credit Information Company and High Mark Credit Information Services. Between them, they track around 220 million accounts of borrowers.
While Experian has seen a 230% rise in the number of people buying credit reports, Equifax jumped 100%.
Mohan Jayaraman, managing director, Experian, said the trend was in line with the experience of advanced markets.
"Consumers are realising fast that a clean credit profile helps a buyer get easy access to credit," said Sanjay Patel, managing director and CEO, Equifax.