CRIF COSMO: Beyond Credit Scores
A New Approach to Assess Credit Risk and New-to-Credit

In developing countries like India, with challenging socio-economic conditions, many low-income individuals seek to create a livelihood by running their own businesses. They do not have financial statements that provide information on their financial performance. Additionally, they don’t have collateral to offer if they want to obtain loans for their business. Considering their business as “too risky” traditional financial institutions aren’t interested in financing them. To meet their funding requirements, they are often forced to borrow from informal/unregulated moneylenders at exorbitant interest rates that may deplete their working capital and drive them deeper into debt.

The introduction of psychometric credit scoring signifies a major shift in the way creditworthiness is assessed and lending decisions are made. Traditional credit scoring models have long relied on financial data, such as credit history and payment behavior, to evaluate a borrower's credit risk. While these models have proven effective for many individuals, they may not fully capture the creditworthiness of those with limited credit histories or unconventional financial situations.

Modern technology and processes enable lenders to look beyond traditional credit risk assessment techniques. By conducting a psychometric assessment that considers factors such as cognition, financial skills, perception of self and community, experience, and stability, lenders can employ contemporary techniques such as predictive analytics to come to a psychometric credit score and assess a borrower’s ability and intent to make timely repayments.

Psychometric credit risk assessments rely on the principle that certain psychological traits and behaviours can be indicators of an individual’s creditworthiness. For example, someone who comes across as diligent, meticulous and displays responsible financial behaviour may be considered a lower credit risk than an impulsive person with careless spending habits.

COSMO: Psychometric Analytics

COSMO redefines credit risk assessment, merging human behavior with financial data, and propels the lending industry into a new era of accuracy, fairness, and opportunity. The tool is in the form of a Quiz – gamified with images and animations – for a better customer experience. It would give the individual an instant personality assessment and the institution the decision for approval or decline. Inadvertently, the assessment can also be used for further customer management purposes and engagements.

How CRIF COSMO Can Help Lenders Evaluate Credit Risk for New-to-Credit Borrowers

In situations where past repayment records are unavailable, lenders often resort to personal interviews to assess creditworthiness. Unfortunately, this approach can introduce personal biases into the evaluation process. To address this, CRIF offers an automated credit scoring platform called COSMO, which incorporates psychometric assessment to instantly evaluate an applicant's personality.

CRIF's COSMO tool analyses various personality dimensions, including conscientiousness, honesty, and discipline, within the context of society's cultural norms and belief systems. For example, conscientious individuals are likelier to demonstrate a strong work ethic. Each personality dimension contributes to assessing the applicant's credit risk.

By leveraging psychometric assessment, this credit scoring platform goes beyond socioeconomic background, educational level, and learned behaviours, providing a profound understanding of borrowers' psyche. It also offers intangible data that allows lenders to personalise their messaging for each customer based on their unique personality traits. This holistic view enables lenders to tailor their approach and achieve a higher level of customer personalisation.


Psychometric credit risk assessments help lenders access an untapped market of millions of individuals without credit histories and use these psychological insights to manage risk efficiently. Reach out to learn how CRIF COSMO can help assess the creditworthiness of borrowers.

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