As per Harshala Chandorkar, senior vice president - consumer relations, Credit Information Bureau of India or Cibil, the company is in discussions with leading telecommunication players like Vodafone and Bharti Airtel for using their respective databases and amalgamating them in the credit score.
Some telecommunication services companies already access credit scores of an individual to get a general overview of his / her credit history and determining credit limit. However, they do not contribute to the credit bureaus' record. Presently, a credit score is based only on home, personal and car loan and credit cards.
However, there is no need to fret yet as the discussions are still in preliminary stages. Till then, familiarise yourself with concepts like credit limits for mobile bills and how these can impact. A credit limit is similar to a spending limit on credit cards.
Says Anurag Prashar, President Corporate Services, Reliance Communications says, "Cibil has approached Reliance Communication with a proposal to use their database to enable us profile our postpaid customers. Their credit profiling framework is intended to help telecommunication players in identification of defaulter. It will also assist in assigning adequate credit limits.”
According to a Bharti Airtel spokesperson credit limit is a function of a customer's usage and past history. Numbers are assigned based on how long you've been with a service provider, security deposit, usage and payment history, services opted for. A steady high usage and regular payment means high credit limit. This limit is reviewed every month.
Although credit limit is also supposed to check your costs it may often exceed your average monthly usage. You are notified only once you reach a certain percentage, sometimes on using 90 per cent of the limit. When you exceed your limit, there's a temporary restriction on outgoing calls and messages. To restart the services, you are required to make an interim payment. Say your credit limit is Rs 2,000 and by the twentieth of the month your bills reads Rs 2,500. You will have to pay a specific amount to bring the outstanding within the credit limit. The balance will be payable in the next bill.
Bharti Airtel is currently exploring mutual partnership with Cibil to leverage their databases. Industry players suggest that the phone payment history when shared with credit bureaus will aid in setting credit limits. Much like the credit card issuers.
This may make it difficult for consumers to move to new service providers without clearing off dues. “There is no central database for service providers currently. If the telecommunication companies share their data with Cibil, this may change,” feels Sanjay Agarwal, senior vice president and group head - retail strategy and branding at Arcil.
Sample this: in the western countries, users without no prior credit history rarely get a post paid connection. They must use a prepaid connection first and after sufficiently building the credit history apply for a postpaid one. Even then, if there are any defaults in payments, customers find it difficult to change service providers for postpaid connections. A practice that may well be applied in India as well.
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