Wednesday, February 6, 2008

When will we have our Credit Scores in India?

CRISIL today announced that it has reached a preliminary understanding with Equifax Inc., USA, and Tata Capital Limited, to set up a Credit Information Company (CIC) in India. CRISIL has applied to the Reserve Bank of India (RBI) for permission to start and operate a CIC. The establishment and commencement of operations of the CIC will depend on regulatory approval from RBI.

CRISIL will be providing the Indian market with credit information services and analytics. It expects the retail finance market in India to grow at about 20 per cent annually over the next five years, buoyed by favourable demographics, substantial increases in disposable income, and changing lifestyles. Lenders will require reliable, accurate information to be able to lend with confidence.

A credit score is based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the perceived likelihood that the person will pay debts in a timely manner. In the United States, the credit score is primarily based on credit report information, typically from one of the three major credit bureaus, Experian, TransUnion and Equifax.

In India, CIBIL is an effort made by the Government of India and the Reserve Bank of India to improve the functionality and stability of the Indian financial system by containing NPAs while improving credit grantors’ portfolio quality. CIBIL provides a service, which allows its Members to make informed, objective and faster credit decisions.

Looks like we will have our own FICO credit score very soon!

India's first online weekly onpersonal finance
Post a Comment