ATM :: Credit scores may get used beyond banking

Nov 26, 2013, 04.32 PM IST | Rajiv Raj, Founder & Director, |
A good credit score is a must pre-condition to get loans from banks. However as time passes by, credit scores will find more areas of application beyond banking


As telecom sector goes through consolidation the calling rates have taken northward approach. As the telephone bills start climbing, the average cell phone user is expected to pay more and may need higher credit limits on his phone connection. Individuals who have pre-paid cell phone connection may also shift to post- paid connection due to various add on facilities offered by telecom companies at attractive prices to post- paid customers.

Credit score, popularly known as CIBIL score, of individuals is expected to play a crucial role in case of post-paid connection. Telecom companies can access an individual’s credit score before giving him a post- paid connection. Credit Information Companies Regulation Act (CICRA) 2005, allows telephone companies to make use of a consumer’s credit report. When a prospective customer fills up customer application form and submits it along with all documents establishing identity and residential address, the telecom companies can pull out credit report of the applicant. If the credit score mentioned in the credit report is not good, the telecom company may not offer a post- paid connection at all.

While increasing the credit limit of existing customer, the telecom company may decide to access the credit score of the client. If the credit score is below 750 or there are mentions of default in the past, the telecom company may not be keen on offering a high credit limit to such a customer. A good credit score means that the customer is disciplined and has got a very good track record to honour credit. Put simply, such customers are more likely to pay the telephone bills on time. Naturally, a telecom company may be comfortable offering higher post- paid limit to such customers.

We all know that a good credit score is a must pre-condition to get loans from banks. However as time passes by, credit scores will find more areas of application beyond banking. It makes sense to accept this reality at the earliest possible. It provides us one more reason to pay our loans on time. Always pay the credit card outstanding on time. A consistent approach to loan repayment that ensures zero late fees and no defaults on loans keeps improving our credit score. This in turn keeps us in a good financial health. And such individuals with credit scores that signify a very good credit repayment track record are ideal customers for telecom companies and may see preferential treatment over others.

It is the time we take a serious note of our credit score and be consistent with our loan repayments. This will not only make us more credit worthy and also puts us on the customer’s list telecom service providers at the top.

The author is the co-founder and director of .

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