Credit score system starts
Credit Information Bureau India Limited, or Cibil, on Wednesday launched its credit score, called the Cibil Transunion score, for customers aspiring to take loans from banks and other financial institutions. HT reports.india Updated: Apr 21, 2011 07:37 IST
You are a step closer to a scorecard that help you get loans faster, or on better terms - or not if your record is less attractive.
Credit Information Bureau India Limited, or Cibil, on Wednesday launched its credit score, called the Cibil Transunion score, for customers aspiring to take loans from banks and other financial institutions.
Ranging from 300-900, the score will give bank customers an indication about their chances of getting a loan - with higher scores boosting prospects.
"Knowing their credit score will enable consumers to get speedier access to credit, better manage their credit history, and derive benefits associated with good credit history," Arun Thukral, Cibil's managing director, told reporters.
The score will be widely acceptable in the country as all banks and as many as 95% of non-bank finance companies are members of the Cibil database.
Thukral said a score closer to 900 implied a higher ability to repay.
A credit score is different from credit reports already available to customers. It is an indication of the probability of default in payment; credit history covers past payment record.
However, Cibil clarified that there is no cut-off or drawing line between a good score and a bad one.
"The definition of good score will vary among the banks and whether a customer will get the loan would depend on the risk appetite and internal policy of a bank," Thukral said.
Bankers say that customers with scores will enjoy an edge over other customers who do not have such scores or credit reports.
"Banks take these credit reports and credit scores seriously before taking a decision on loan approval," said NS Srinath, executive director, Bank of Baroda.