Latest RBI Regulations on Credit Report: Check List Here

RBI Regulations on Credit Report

The credit score is one of the most important things considered by the bank when giving an education loan to study abroad or any other type of loan. The credit report shows your ongoing loans, repayment behaviour, and history, or any other pending credit card bills. Credit information companies (CIC) provide your credit history to the banks. Recently, The Reserve Bank of India issued a circular directing the CICs to implement some new rules regarding the credit inquiries made by banks and NBFCs. Let’s understand the new set of rules issued by the RBI for credit scores.

1. Guidelines on Credit Information

The RBI has released the circular in which the first direction states “Intimation of access to Credit Information Report and updation of credit information with Credit Information Companies”. This means that the RBI has directed all the CICs to send alerts through SMS or email to the customers when their credit report is accessed by the specified users i.e. banks, NBFCs, or any other registered financial institution. When you will apply to a bank or NBFC for a loan and initiate the inquiry, you will immediately receive a mail and SMS for the same. The alerts shall be sent by the credit information companies only when the inquiry is reflected in the credit report of the customer. 

  • The companies have to send SMS or email to the customer while submitting the information to the banks/NBFCs regarding the payment default, or overdue on existing loans. 
  • The Uniform Credit Reporting Format for reporting credit information by CIs to CICs has been modified in order to enable the sending of alerts through SMS or email. 
  • The RBI has advised all credit information companies to organize special awareness campaigns to inform their customers about the benefits of submission of their mobile numbers and email addresses. 

2. Setting up of Nodal points/ officials by CIs

Reserve Bank of India has clearly directed the credit information companies to have a dedicated nodal point of contact with the purpose of redressing customer grievances. All the details of the nodal point or official along with email ID and contact mobile number shall be provided to the CICs. In case of a change of the nodal poc, the CIs shall inform CICs within five calendar days of such a change. This can also be helpful for students who have taken or applied for an education loan as they will find it easy to get their queries addressed to them. 

Do you know how credit score plays an important role in your education loan? Check this blog on Impact of Study Abroad Loans on Credit Score

3. Root Cause Analysis of the Complaints by CIs

All the CIs shall undertake Root Cause Analysis (RCA) of the grievances raised by customers at least on a half-yearly basis. The company shall also use the information on data rejected by the CICs and the Data Quality Index (DQI) provided by CICs as sources of information for carrying out RCA. RCA Analysis shall be reviewed by the Top Management of CIs, at least, on an annual basis.

4. Reasons for Rejection of Requests for Data Correction by CIs

CIs have been directed to inform the customers about the reasons for the rejection of their request for data correction (if applicable). This will help the customer to understand the issues in the CIR. The complete list of reasons for rejection of requests shall be circulated by CICs to all CIs. This process will also help you to know how to increase the credit score to get an education loan as you will be aware of the working of CICs. 

5. Periodic Review of match logic algorithm by CICs

All the credit information companies are directed to have a board-approved policy in order to undertake periodic reviews on a half yearly basis (minimum) of the ‘search & match’ logic algorithm. The algorithm is implemented by the companies to provide the credit information report of a borrower. RCA of complaints that have been undertaken by CICs shall be used to identify the issues in the ‘search & match’ algorithm.

Do you know credit score can also affect loan refinancing or transfer? Check this blog and understand credit scores and its impact on education loan refinancing 

6. Easy access to Free Full Credit Report for the individuals by CICs

The RBI has directed the CICs to provide easy access to free full credit score (FFCR) once in a calendar year i.e. January to December to the individuals who have a credit history available with CIC. A dedicated link for the same should be reflected on the homepage of the website. 

FAQs on Latest RBI Regulations on Credit Report

What are the new rules set by the RBI for credit reports?

The RBI has recently issued a circular stating that all credit information companies have to tell the individual when any bank or financial institution makes an inquiry for a credit report. Also, you will get a full credit report once in a calendar year for free and the application link for the same shall be displayed on the website.

How will I know that the bank has checked my credit report?

The credit information company will immediately send you a message or an email if any bank or financial institution makes an inquiry about your credit report. It will also describe the exact reason for which the enquiry has been made.

How can I check my CIBIL score?

You can check your CIBIL score through various merchants who provide free credit enquiry services. You can also visit the official websites of credit information companies like Experian, CIBIL, Equifax etc. 

Where should I report if a closed loan is still showing active in my credit report?

Check the credit report company that has sent the report and visit their official website. Look for the option showing the ‘write to us’ or ‘report an error’ button. Click on it and submit your complaints. Please note that the update may take around 10-15 days to reflect in the report. 

Can I file a complaint with the RBI if the bank is not approving loans after being eligible?

You can file a complaint with the RBI Ombudsman department. Search for the complaint management system portal and file your complaint there. 

All the above-mentioned directions circulated by the Reserve Bank of India must come into effect after 6 months from the date of the issue of the circular. Both CICs and CIs have been directed to set up important systems and processes in order to implement these directions within the specified time frame.

Related Blogs
Importance of Maintaining Good Credit Score
Get Education Loans with Low Credit Scores
Check CIBIL Report for Discrepancies while Applying for Education Loan

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