New Delhi: First-time borrowers without a CIBIL score should not face outright rejection of loan applications, the government clarified in Parliament.
Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha during the monsoon session that the Reserve Bank of India (RBI) has not prescribed any minimum credit score requirement for loan approval. RBI has advised banks and financial institutions not to reject applications solely due to lack of credit history.
This enables new borrowers—whether seeking education, housing, personal, or business loans—to be assessed on other parameters such as income details, employment records, and repayment capacity, rather than a credit score alone.
Experts note that the move promotes financial inclusion, as lenders may also consider alternative data like utility bills and digital transactions to evaluate borrowers.
In India, a credit score typically ranges from 300 to 900 and reflects repayment behavior. While it remains a useful benchmark, the absence of a score does not automatically disqualify applicants.
India currently has four licensed credit bureaus—TransUnion CIBIL, Equifax, CRIF High Mark, and Experian. For new borrowers, repayment history will begin to build only after availing their first loan. This, in turn, will shape their future borrowing terms.
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