China's central bank will soon launch trials of the first national consumer credit history database.

This is the first attempt by the People's Bank of China to build a unified data source on mortgages and other consumer loans.

Bank officials say the database could mark a significant step in the development of a consumer credit. The central bank is collecting data from banks across China and will begin trials on the system in several provinces by the end of the year.

Experts believe a national credit database could be a boon for the economy by unleashing consumer spending through the use of credit cards and consumer loans.

Banks and credit agencies in China now have no central system for assessing individual credit history, making it difficult to ascribe risk and price loans.

Many banks offered low down-payments, or even waived them entirely, for car loans in recent years. But defaults rose quickly, largely due to the lack of a unified credit database.

Source: CRI news