Your Credit Score Doesn’t Matter Anymore—Here’s What Lenders Are Looking At Now!

Priya operates a thriving catering business in Pune. Her dal tadka is legendary, her client list is growing, and she's never missed a payment to anyone. But her credit score? Let's just say it's not as impressive as her biryani.

For years, India's lending system has been stuck in a time warp. Your CIBIL score, salary slips, and bank statements were the holy trinity of creditworthiness. If you didn't fit the template, tough luck. That brilliant freelance graphic designer? Declined. The small tea stall owner who's been profitable for decades? Sorry, insufficient documentation.

AI-powered credit decisioning may look at thousands of data points in real time, including transaction trends, cash flow consistency, employment stability and even how people spend their money. These systems are different from static scorecards that treat each borrower like a checklist exercise. Instead, they learn all the time and get smarter with each choice they make.

"This creates two massive advantages for lenders. First, they can lend more deeply, approving creditworthy applicants who would otherwise have been declined by traditional models. Second, they can price credit with laser precision. That means responsible borrowers with limited credit history get fairer rates while genuinely high-risk profiles are priced appropriately," said Mr Joydip Gupta is the Business Head of Asia at Scienaptic AI.

For Indian lenders, this translates directly into lower delinquency rates and stronger portfolio performance. For borrowers, it means a system that's finally both inclusive and transparent.

"AI is really good at finding problems early on. These technologies can pick up on small warning indicators, such as changes in how people pay back their loans or how they act when they make a transaction, long before traditional models would. Instead of waiting for defaults to arise, this lets lenders step in early with restructuring or help," Joydip Gupta added.

What's important is this: Responsible AI doesn't take the place of human judgment; it makes it stronger. Credit officers still make the ultimate decisions, but now they get a full, data-rich picture of each borrower's financial situation.

"This method needs good governance, clear explanations, and strict compliance with the rules. But when done right, AI transforms risk management from a defensive back-office function into a strategic advantage that drives both profitability and inclusion is becoming the great equalizer as India's lending system moves from traditional banks and NBFCs to digital-first platforms," Joydip Gupta stated.

The best institutions will be those that employ AI not only to make judgments automatically but also to learn more about their borrowers and create loan products that reward good money management.

When that happens, risk management changes from saying no to finding responsible ways to say yes. That's a win for lenders, borrowers, and India's bigger ambitions for financial inclusion.

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