'Being credit-healthy can get you better loans'

Published: 28th July 2013 10:33 AM  |   Last Updated: 29th July 2013 01:55 PM   |  A+A-

Vishakha-Talreja

Credit health improvement company Credit Sudhaar recently tied up with insurance major Tata AIG to offer clients insurance plans that are not available over the counter. Vishakha Talreja speaks to Arun Ramamurthy, who founded the company with Gaurav Wadhwani in 2010, about the services provided by the company and its scope in India.

What exactly does Credit Sudhaar do?

We help individuals and companies improve their credit health. Just like a person goes to a gym to lose weight or maintain fitness, people come to us for improving or maintaining their financial health. We help them by finding their credit scores and working towards improving or maintaining their credit health.

How is this different from what Credit Information Bureau India Limited (CIBIL) does?

CIBIL gives information or reports; our company helps in restoring and enhancing credit health using the same information.

How does improved credit health help individuals?

Being credit-healthy is important, be it for getting a better interest rate on loans or improving one’s job prospects or getting a better insurance plan. Let’s take a simple example. Say two people take home loans of Rs 50 lakh each–one with a credit score of 650, the other with a credit score of 800. The person with the higher score is likely to get a loan at a lower rate of interest than the person with the lower credit score. The differential could well be about 2 per cent, which translates into savings of Rs 10-12 lakh. Similarly, with organizational fraud on a rise, many corporate houses today check the credit history of a person before hiring him, to ensure that the person has not compromised on his credit. Even for promotion, they consider invididuals with good credit history.

So how can you help improve someone’s credit health?

Our company restores, enhances and protects a person’s credit. We use trained and certified counsellors to advise our clients. The restoration phase is one where we look at all the credit reports of the client. If an individual has made mistakes in the past we try and rectify those mistakes in the restoration phase. We also have our own NBFC (Credit Sudhaar Finance) which provides credit enhancer loans. So we take exposure on our books to improve credit health of an individual. In the protection phase, we provide unique protection features such as ID theft protection and lost wallet protection. The market in India for our services is huge with about 15 crore people on the credit bureaus.

Is the trend of knowing one’s credit score catching on in India?

Credit Sudhaar’s research suggests that 97 per cent of people in the age group of 24-45 years do not know about credit scores, unlike in the UK, US and South East Asian countries, where everyone is aware about their credit scores. But, with increased awareness, the quest for credit health is likely to grow exponentially here. Currently, in India,  one can find one’s credit scores through CIBIL or using the services of companies like Equifax and Experian on thepayment of a small fee. Using Credit Sudhaar’s estimator they can know their credit score too.

You recently tied up with the Tata AIG Insurance. What will the partnership do?

We are working with Tata AIG to create plans to protect credit. Four out of five people in India are victims of identity theft. Our protection plan safeguards clients against this risk to the extent of any outstanding loan and also all expenses incurred in clearing our clients’ poor track record, if any, (as a result of the identity theft) from the bureau. We also have plans that protect against loss of debit card or wallet and also against ATM robbery.

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