The Reserve Bank of India (RBI) introduced five rules on CIBIL scores a few months ago. The central bank added one more rule a few days ago. The CIBIL score is a three-digit numerical summary of your credit history, rating and report that ranges from 300 to 900. Your credit score improves when your score moves closer to 900.
The Reserve Bank of India (RBI) has approved four credit reporting companies in India: Credit Information Bureau (India) Limited (CIBIL), Experian, Equifax and Highmark. The CIBIL score is the most popular in the country.
If your CIBIL score is good, it will help you apply for a loan and maintain your good credit score. You must avoid one mistake which is defaulting on payment. This means paying the monthly installment on time and never defaulting otherwise your CIBIL score will be severely affected.
Now, let us learn about all the rules that the RBI introduced regarding CIBIL scores.
1- Update CIBIL every 15 days
As per the new RBI rule, credit scores of customers will be updated every 15 days. This rule will come into effect from January 1, 2025. The RBI has said that banks and financial institutions should update their credit score as soon as possible.
The CIBIL score of the customers can be updated on the 15th and at the end of every month. If the credit institutions (CI) and credit information companies (CI) wish, they can also fix certain dates as per their wish, on which the data can be updated every 15 days. The credit institutions (CI) are required to send the credit information of the customers to the CIs every month.
2- The client must send information to consult CIBIL
The central bank has communicated to all credit reporting companies that whenever a bank or non-banking financial institution checks the credit report of a customer, the information is required to be sent to the customer. This information can be sent through SMS or email. There have been many complaints related to credit rating, so the RBI has taken this decision.
3- It is necessary to indicate the reason for the rejection of the application.
According to the Reserve Bank of India, if a customer’s application is rejected, it is necessary to inform the customer of the reason. This way, the customer will be able to better understand why his application has been rejected. It is important to prepare a list of reasons for the rejection of the application and send it to all credit institutions.
4- Provide free, complete credit reports to customers once a year
According to the Reserve Bank of India, credit companies must provide free and complete credit scores to their customers once a year. For this, the credit company will have to display a link on its website, so that customers can easily check their free and complete credit report. With this, customers will know their CIBIL score and complete their credit history once a year.
5- It is necessary to inform the client before communicating the breach
According to the Reserve Bank of India, if a customer is going to default on his/her obligations, it is important to inform him/her before communicating the default. Lending institutions should share all the information by sending text messages or email. Also, banks and lending institutions should appoint nodal officers, who will work towards resolving issues related to credit rating.
6- The claim must be resolved within 30 days.
If the credit reporting company does not resolve the customer’s complaint within 30 days, it will have to pay a penalty of Rs 100 per day. This means that the longer it takes to resolve the complaint, the more penalties it will have to pay. The institution disbursing the loan will have 21 days and the credit agency nine days. If the bank does not inform the credit agency within 21 days, the bank will pay compensation. If the complaint is not resolved even after nine days of information from the bank, the credit agency will have to pay damages.
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