The lenders in the country are acting very cautiously while lending to the customers. The banks are very much concerned about the credit score of the applicant and prefer lending to those with a sufficiently high credit score.
The Managing Director of leading credit agency, CIBIL, Mr. Arun Thukral said, "The trend indicates that banks are becoming more diligent in acquiring new customers."
In a study conducted by CIBIL, it was found that over 88% of the customer who borrowed home loans in the year 2011 had a credit score of 750 or above.
In some countries, customer possessing high credit score are offered lower rate of interest and even better terms and conditions. However, no such benefits are offered by the lender in India.
The Chief Counselor with Abhay Credit Counseling Centre, V. N. Kulkarni said, "There are no differential rates of interest being offered to borrowers currently. Ideally, banks should offer borrowers with high scores relief in terms of interest rate and charges."
"Besides, erroneous reporting by banks, where borrowers have been wrongly declared as defaulters, has been a cause of distress to many borrowers. For the entire framework to function efficiently, a system where the database and the credit score get rectified immediately after the inaccuracy is established needs to be put in place," he said.