The Reserve Bank of India (RBI) has introduced new rules to make the credit score process easier and fairer. These changes will help solve complaints related to credit scores and improve the overall system.
The goal is to make it simpler for people to understand and maintain their credit scores, which are important for loan approvals.
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New Rules for Easier Loan Process and Safe Credit Scores
RBI has introduced six new rules to make taking loans smoother and to protect your credit score. These changes will also help people with good credit scores get loans more easily. Let’s look at some of the major changes:
CIBIL Score Update in 15 Days
Starting from January 1, 2025, the process of updating your credit score will be faster. Your CIBIL score will now be updated every 15 days, giving you regular updates about your credit standing.
Information on CIBIL Score Checks
From now on, whenever a bank or financial institution checks your credit score, you will be notified by email or SMS. This change comes after complaints from people who were unaware of when their credit scores were being checked.
Reason for Loan Rejections
If a bank, credit institution, or non-banking financial company (NBFC) rejects your loan application, they will have to explain why. This transparency helps you understand why your application was turned down and allows you to improve your credit score.
Free Credit Report for Customers
Another important rule is that credit companies must now provide you with a free full credit report once every year. You can check your complete credit history online through a link provided on the credit company’s website.
Informing Before Reporting a Default
If you are about to default on a loan, the lending institution must inform you before they report it. They can send you a warning via email or SMS to let you know about the situation.
Timely Resolution of Complaints
If you file a complaint about your credit score and it isn’t resolved in 30 days, the credit company will have to pay a fine. The penalty is Rs 100 per day, and it keeps increasing as the delay continues.
The loan-disbursing institution has 21 days to give information to the credit bureau, and the credit bureau has 9 days to resolve complaints. If either party fails to meet the deadline, they will face a fine.
These new rules will help make the credit score system more transparent and accessible, making it easier for you to manage your credit and loans.