If you are currently house-hunting, chances are that you may have to produce your credit history to the owner to ensure that you would be able to pay your rents on time.
Thanks to the economic slowdown leading to frequent layoffs and shrinking pay packets, cautious landlords are seeking credit history and ratings of their tenants before putting up their house on rents.
Sample this: Nitin Khanna, who retired two months ago after 36 years in central government service, owns a three-bedroom apartment in Dwarka.
He dismissed his tenant who had been occupying his apartment since 2010 after the latter stopped paying rents for the last five months.
Khanna has sought credit history from prospective tenants to ensure that his revenue stream does not get choked.
However, currently, only those looking for commercial space or high-end residences are being asked to provide their credit history, said real estate analysts.
Further, this trend is restricted mainly to New Delhi and Mumbai.
According to the Credit Information Bureau (India) Ltd (CIBIL) — the agency that tracks credit history of individuals and assesses their credit worthiness — the trend in India is still at a nascent stage. However, in many developing economies, it has become the order of the day.
“In India we may see this trend picking up and it could become a norm rather than an aberration,” Arun Thukral, managing director, CIBIL, told HT.
“The trend of verifying tenant creditworthiness via credit history depends on the availability of credit card history but as far as budget to mid-income segment residences is concerned, credit report use is still not a norm if we look at the pan-India scenario,” said Santhosh Kumar, CEO, operations, Jones Lan LaSalle India, a real estate consultant.
The number of individuals getting their credit score determined rose last year compared to two years ago, said Thukral.