CIBIL, or Credit Information Bureau of India Ltd, which provides credit information to credit guarantors, is now extending its services to individuals. CIBIL till recently worked in the B2B segment alone.
When a consumer applies for a home loan, banks enquire at CIBIL to access details on the borrower’s credit performance. “If you are able to buy an electronic gadget with just a downpayment, it is CIBIL which has ensured one can buy an electronic gadget on credit on-the-spot without hassles,” said Arun Thukral, MD, CIBIL.
Financial institutions and everybody in industry requires credit reports, added Thukral. Today, most financial institutions use the CIBIL TransUnion score to assess the risk associated with a borrower. The CIBIL TransUnion score displays your current credit score. It is calculated based on the credit behaviour as reflected in the “accounts” and “enquiry” sections of the credit report.
An individual can buy a credit report for Rs 450, while for companies it costs Rs 2,560. That means individuals and company want their own reports. The Credit Information Companies (Regulation) Act 2005, notified in 2007, has allowed companies like CIBIL to extend the service to individuals.
Earlier, CIBIL was providing these reports only to the banking industry, telcos, stock brokers, credit card companies and industry in general. CIBIL has now been working to educate people on how to interpret credit reports. Earlier as per law were not permitted to do it.
Meanwhile, there are some three other such companies that are in the process of entering the Indian market.
With younger generation look at credit rating and credit cards, CIBIL’s services are in demand among this group. The change is happening very fast, said Thukral, adding “We want to tell people not to overleverage. Credit improves living standards which is the objective of credit. Wherever credit bureau is there, credit penetration has been increasing.”
