Experian launches new consumer credit score: All you need to know

Experian Credit Information Company India Limited today announced the launches a new consumer score (Delphi score), which will provide a summarised indication of an individual’s creditworthiness. Mohan Jayaraman, Managing Director, Experian Credit Information Company of India Pvt. Ltd. and Country Manager, Experian India, said in the companies press release said, “We are pleased to announce our effort towards facilitating a well-balanced, credit-scoring mechanism in India.”

What are the parameters: There are a number of parameters that will go into making the consumer score. For instance, your existing outstanding amounts, your payment track records as well as your past defaults, if any. The score will measures your propensity to go delinquent within a 12-month time frame.

Range: The Delphi score range will be in the range of 300 to 900. A higher score would mean that you have a higher creditworthiness. Keep in mind, a higher score is look upon as a huge positive by banks when you approach them for a loan.

More from Money

Rationalise DDT rate to 10% in upcoming Budget, industry body CII tells govt BSE Sensex trades flat ahead of Q3 results; Bharti Airtel, Kotak Bank among major gainers

New borrowers: As mentioned above, the score would be based on you past payment history. But if you are a first time borrower aka first-to-credit customer, you need not worry. Reason being, the credit bureau has also introduced a new scorecard for first-to-credit customers or individuals who have never had a loan in the past. Jayaram added, “The new scorecard has been built on a richer credit history thereby producing a more predictive scoring model which will be able to significantly discriminate between the borrowing habits of individuals.”

Unlike the credit score, the new scorecard for first-time borrowers will have six grades between one to six, with a score of one representing high risk and six representing low risk. That means anyone with a higher score will be looked uponfavorably as a potential customer by banks.

End note: Currently, the Credit Bureau of India Limited (CIBIL) is the oldest credit bureau inf the country, and there score is also in the range of 300 to 900. In the western world, consumers get their credit score from multiple bureaus as a good score can be used to bargain for improved lending terms. Most financial planners says it’s good to get a credit report at least one a year to know your credit worthiness for any future borrowing.