How on earth can your lender decide that you are a risky borrower? It may not have been possible for banks earlier to measure the risk associated with a borrower. But it's a thing of the past now.

The Credit Information Bureau of India, CIBIL, in collaboration with TransUnion has announced the development of the CIBIL TransUnion credit score. This generic credit score has a range of 300-900 points. If a borrower has a score of 300 then s/he will be considered as a risky borrower. And a borrower having a credit score of 900 will be considered the safest.

"The product is a generic one and is valid and applicable across all products and for all lenders," said the outgoing Chairman of CIBIL, Mr Santhanakrishnan. The CIBIL TransUnion credit score was launched on November 27 and already members are asking for the credit profile of borrowers," he added.

This generic credit score is developed by taking five parameters into consideration, explains Mr Santhanakrishnan. They are: Credit utilisation, frequent defaults by borrowers, frequent loan enquiries made to a number of financial institutions, and attributes of the trade, like, the age of the credit history and lastly the product mix of your borrowings.