CIBIL Report : Home Loans Score 700 is 63%

India's leading credit information provider CIBIL (Credit Information Bureau (India) Ltd) is working on developing a new rating system to generate data for use by the insurance industry, insurers, both life and general. For life and general insurers the record will help in pricing decision. 

Mr. M.V. Nair, Chairman, CIBIL said, ''Our company plans to meet the insurance regulator IRDA to take it forward."

Speaking to a group of media persons on the sidelines of the 3rd Annual Credit Information Conference in Chennai on recently. Mr. M.V. Nair said currently CIBIL is providing quality credit rating information to its members.

To prove his point, Mr. M.V. Nair gave an example, saying the delinquency rate among credit-card users has come down to 1.5% in 2012 from 7% in 2009. He said this is in spite of “a reasonable growth” in the number of credit-card users in India.

Now, CIBIL caters to financial institutions including Banks, Credit card firms, NBFCs (Non - Banking Finance Companies), co-operative Banks and any lender in the system.

CIBIL got about  840 members and number of consumer records process increased to 20 crore from 1.3 crore in 2004, said Mr.Nair.

Unless they (customers - borrowers ) have better score, they may not get a credit card or / any other loan, so their is a constant endeavor by the borrower to keep the payment track record so that the score is better.

For example in home loan in 2010 housing sector those who had score of 700 was about 23 per cent today it is 63 per cent this means the Banking sector started choosing borrowers who have better score. The natural sequence will be those who got better scores will bargain for better price & this will happen in one or two (2) years.

Earlier, delivering his keynote address at the conference under the theme ‘The Drive for Sustainable Credit Growth’, Mr. N. S. Vishwanathan, Regional Director for Tamil Nadu and Puducherry, Reserve Bank of India (RBI), said, ''MSMEs (Micro, small and medium enterprises) hold high potential for credit growth. The penetration of the formal services agencies in this segment is inadequate. Developing a good database of credit information on this segment may help the formal financial services sector to be more comfortable to reach out to this sector.

The banks have to get the risk & pricing alignment right to create quality assets. Elaborating on this, Mr. N. S. Vishwanathan said for banks, there are two (2) major factors to consider — cost &ease of transaction. Banks must primarily focus on the latter, as cost will automatically come down once the number of transactions goes up. Accurate & elaborate data of information on credit rating is the most important tool to ensure ease of transaction."

Mr. Satish Pillai, COO, CIBIL made a good power point presentation about CIBIL. 

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