The Hindu Business Line : CIBIL launches score for personal loans

Mumbai, May 14 Credit information bureau CIBIL and TransUnion on Thursday launched a score for personal loans. The score will help in predicting the likelihood of delinquencies by personal loan borrowers over a period of 12 months.

So far, banks and lenders were using CIBIL’s generic score for all kinds of loans. But the demand for a separate score for personal loans came from lenders themselves, said Mr Arun Thukral, Managing Director, CIBIL.

Although the market for personal loans has slowed down, close to 20 per cent of all enquiries from lenders that come to CIBIL were for personal loans, said Mr Satish Pillai, General Manager, Analytic and Decision Services, TransUnion.

The CIBIIL TransUnion Personal Loan Score has a scoring range of 300-900 and addresses the key predictors of delinquency on a personal loan including overdue amounts, high credit amounts for trades, the number of inquires, outstanding balances on delinquent trades and overall levels of delinquency.

Banks submit data on a monthly basis about repayment histories of their borrowers and ask for a score each time they receive a loan application.

The scores are always calculated afresh whenever a bank asks CIBIL for data on a borrower, Mr Pillai said.

After the Reserve Bank of India granted approval for credit information bureaus, CIBIL can now provide information to telecom and insurance companies as well. It is in the process of collecting data for developing a suitable product, Mr Thukral said.

The company should also be able to provide reports on individual credit scores to borrowers by the next fiscal, he added.

CIBIL currently has 135 million accounts of individuals and businesses and caters to 165 customers including banks, financial institutions, non-banking financial companies and housing finance companies.

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