RBI Introduced 6 Mega Changes in CIBIL Score Rule. All Common Man Will See Effect in 15 Days.

The Reserve Bank of India (RBI) has introduced six key rules to improve credit score transparency and efficiency, addressing growing complaints from customers about credit score discrepancies and misuse. These rules came into effect on January 1, 2025, and aim to empower customers and ensure better accountability from banks and financial institutions.

1. Credit Score to be Updated Every 15 Days

• Credit scores will now be updated every 15 days instead of monthly.
• Banks and financial institutions are required to submit credit data to Credit Information Companies (CICs) promptly to ensure up-to-date information.
• This ensures that credit scores reflect real-time activity, benefiting those who clear their dues regularly.

2. Notification on Credit Report Checks

• Whenever a bank or NBFC checks a customer’s credit score, the customer must be informed via SMS or email.
• This step aims to prevent unauthorized access to credit scores and ensures customers are aware of every credit inquiry made in their name.

3. Reason for Credit Request Rejection Must be Provided

• If a customer’s loan or credit request is rejected, the reason must be clearly communicated.
• Financial institutions must prepare a standardized list of rejection reasons and share it with customers.
• This measure enhances clarity and transparency in the credit approval process.

4. One Free Full Credit Report Annually

• Customers are entitled to one free full credit report every year from credit information companies.
• A dedicated link must be available on the CIC’s website for easy access.
• This empowers customers to review their credit score and history annually without any cost.

5. Notification Before Reporting Defaults

• Before reporting a loan default, financial institutions must notify the customer via SMS or email.
• Borrowers must be given a chance to resolve issues before being reported as defaulters.
• Institutions must also appoint Nodal Officers to handle credit-related grievances efficiently.

6. Complaint Resolution Within 30 Days

• Credit Information Companies (CICs) must resolve customer complaints within 30 days.
• Penalty Structure:
  • ₹100 per day fine for delays beyond 30 days.
  • Banks have 21 days to address complaints raised with CICs.
  • CICs get 9 days after receiving information from banks to resolve complaints.
• Delay in resolution will result in financial penalties for both banks and CICs.

How These Rules Benefit You?

• Better Credit Score Management: More frequent updates ensure accurate reflection of financial behavior.
• Increased Transparency: Clear communication about inquiries and defaults.
• Empowered Consumers: Free annual credit reports enable better financial planning.
• Faster Complaint Resolution: Penalties for delays ensure timely grievance redressal.
• Accountability: Financial institutions and CICs are now directly accountable to customers.

Key Highlights of RBI’s New Credit Score Rules