Now, age, salary, loans to decide your credit rating

India’s credit bureau, set up by Citigroup, ICICI Bank and other lenders, will begin grading 100 million borrowers from November to help banks curb defaults and creditworthy customers pay lower interest rates.

The Credit Information Bureau of India (Cibil) will evaluate ages, salaries and existing loans to assign individual ratings, chairman S Santhanakrishnan said. Multiple applications or using one credit card to repay another will result in lower grades and higher borrowing costs.

Mounting losses on loans made to people with poor credit at US lenders have roiled markets in the past month, underlining the need for banks to evaluate risk. A nationwide database will help Indian banks reduce loans to risky borrowers before the impact of seven interest rate rises in two years increases defaults, according to the Indian unit of Standard & Poor’s .

“We expect non-performing loans in retail housing to rise pushing up the absolute bad debt,” Tarun Bhatia, head of corporate and government rating for Crisil said. Banks have pooled borrowing histories including missed installments and repayments since the Cibil was set up in 2004 with a database of four million borrowers. Tighter credit checks have reduced bad loans to 3.4% of total credit at the end of June 2006 from 5.1% a year earlier, according to the central bank.

The “delinquency rate will come down significantly,’’ Santhanakrishnan said in an interview in Mumbai, where the company is based. ‘‘ It is a oneshot condensation of credit history into the risk profile.’’ Unlike agencies in Australia or Korea that focus on defaults, Cibil will maintain borrowers histories who repay in full and on time, helping them get lower rates on loans.