In a bid to improve credit -quality, Credit Information Bureau (India) Limited (Cibil) and TransUnion, a global leader in credit and information management, have announced the development of the Cibil TransUnion Score that will evaluate the credit worthiness of borrowers.
S Santhanakrishnan, chairman, Cibil and Larry Howell, president, TransUnion International, Asia -Pacific and Europe announced the initiative on Wednesday.
?It will predict the likelihood of a customer becoming a defaulter in more than 91 days on one or more lines of credit including credit cards, personal, home and auto loans by next year?, Santhanakrishnan said.
Borrowers have taken advantage with the increase in available credit options despite their poor track record. The new score will help the banks and financial institutions to minimise such risks of future defaults and check the consumer abuse of the credit system.
In reply to a question, he said that the Union government is planning to introduce new laws that will permit such sharing of credit profiles of the customers.
The Reserve Bank of India (RBI) is also working on the proposed guidelines to maintain data of defaulting customers.
?It will help the good customers to get loans at a competitive rates, and those with low scores will have to pay higher rates,? he said.
?First, the credit score will be prepared on individual customers, and, gradually, we will compile a list on industrial defaulters,? he said.
Credit score will also include bad performers in the field of telecom and insurance sectors in the coming years.
Presently, the data will be compiled on the monthly basis and made available on a fortnightly basis, once core banking is introduced.
The credit score on the individual customers will be prepared in a transparent manner he said.
