Introduction of Personal Credit Scores in Russia Seen Helping Banks and Consumers
August 28 – In the first quarter of 2018, Russian banks turned down 48 percent
of applicants for loans and charged those who did get them higher rates than
they otherwise might because the banks had no good way to ensure that they were
only offering loans to those who would repay them.
at the beginning of next year, a new law will go into effect requiring that
every Russian will be given a credit score much as is already the case in many
countries around the world.This will “change
the life of Russians,” according to the Russian7
portal’s Ivan Roshchepiy (russian7.ru/post/personalnyy-kreditnyy-reyting-kak-o/).
Up to now, the
journalist says, banks have had to do their own due diligence, something that
adds to the time it takes to decide on a loan application, leads to higher fees
and often keeps applicants in the dark as to why they were denied – and thus
without any guidance as to what they might do in the future to improve their
chances of getting a loan.
a personal credit score, applicants will know more, banks will know it more
quickly, and the latter can both make decisions faster and lower rates on good
risks because the scores will sort out those who are not. Interest rates should
thus fall, and approval rates go up to the benefit of both banks and people.