The average Indian who has long loathed credit is now in favor of credit for its convenience in shopping and financing housing, automobiles and consumer durables. As the stigma attached to debt subsides, the Indian credit industry has boomed. Until now lenders in India have not had a single tool to evaluate the potential risk posed by lending money to consumers so as to mitigate losses due to bad debt.
Enter the "Credit Score"
Enter the "Credit Score"
The "Credit score" is a three digit number assigned to an individual and is an indicator of his credit worthiness. The Credit Information Bureau (India) Limited established by the government of India will assign and maintain the scores. The scores are based on previous loan history including the debt-income ratios and default history.Lenders will use the scores to determine interest rates and could even reject applications if scores are too low. Indian's have been used to receiving a uniform interest on loans but now that is about to change. In the US the three digit score is ubiquitous and financial gurus like Suze Orman even go so far as to insist that the score is something partners must agree to share before marriage.
Considering how competitive and ambitious most of us Indians are I don't think its too much of a stretch to see the credit score as becoming a symbol of pedigree even in matrimonial columns.
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