How banks decide to give a loan

For years, banks have had to fall back on their own experience to gauge consumer's credit worthiness. However, in the last few years, things have started to change for the better. Lenders now are armed with your credit report provided by Cibil (Credit Information Bureau India Limited) that has all the pertinent details of your credit pattern (loans and credit cards). More importantly, since this data is collated from across the country, whether you have defaulted in Mangalore or in Mumbai, you are still on the radar. And when you apply for a loan or a credit card, lenders call for a copy of credit report from Cibil before considering your case. This report has a credit score that is arrived at by analysing your repayment record, outstanding debt, credit enquiries, amount of credit limit utilised and various other parameters.... [read full story]