Want loan? your credit card history will be the deciding factor...

In next two years your credit history will determine whether you can get loan or not!!

Yes, it is because the present scenario is far from perfect where borrowers seek loans on the same rate regardless of their payment record and financial history which is unfair for those who are diligent with their payments. But now it will become more difficult for consumers to borrow unless they have a sound credit history across a range of products.

Capturing of relevant and timely information by credit bureaus and its effective sharing with financial institutions will have important ramifications in driving the efficacy of the whole lending industry. Credit bureaus are steadily building their presence in India amid the burgeoning number of Indians who use financial products.Thus there is availability of a wide range of data, and value-added products that help interpret the value of that data, thereby improving decision making quality.

Most credit rating bureaus operate as joint ventures between banks. This is a mutually beneficial relationship—facilitating data sharing between banks and bureaus, and the subsequent access to reports.

Typically, banks do not actively track customer activities after the sanctioning of loans, unless the customer defaults or delays a payment. So active portfolio management of accounts will be the next important step that lenders will undertake. Customer profiles are fast changing with a new penchant for multiple credit cards and loans.

Active portfolio management will help track customers constant efforts at leveraging themselves. Credit bureaus will play a key role in the implementation of active portfolio management. Thanks to modeling and monitoring tools like these, lenders can actively manage their loan portfolios to ensure an efficient risk/reward ratio and sufficient diversification of loans—much as they would in an investment portfolio.

Personal credit reports will play a key role in empowering borrowers to begin negotiating interest rates based on their credit history.

This assumes special significance in an environment marked by both high interest rates and spiraling cost of living. The time is not far off when consumers with good credit history will be in the driver’s seat while going to their banks of choice and negotiating better rates for themselves. A multi bureau set up implies this will be done sooner than later, making it a win-win for both consumers and lenders.

Isn't it an excellent step for us?? Now our honestly and principles will be valued. Finally we will be able to get loans with lesser interest. So sorry for all those who take loans to pay other loans.. but this system is going to be the fair one.. A fair one indeed.