Now you don’t have to wait for your credit score to be updated. From January 1 next year, banks and financial institutions will update credit scores as frequently as possible. RBI has announced this.
Central Bank Governor Shaktikanta Das said on August 8 that credit data should be updated every 15 days. It can be updated on the 15th or last date of every month or Credit Institutions (CI) and Credit Information Companies (CIC) can agree on a particular date in this regard.
Both the customer and the bank will benefit
Currently, Credit Institutions ( CI ) are required to provide customer’s credit information to CIC every month. Digital lending consultant Parijat Garg said that correct credit information is necessary for both taking and giving loans. Its prompt update is also essential. He said that fresh credit information is very important for banks and NBFCs. Manish Jain, Country Managing Director of credit bureau Experian India, said, “The data should be updated every week or every 15 days. If this is not done, the credit score that you see today in the era of 3-day, 7-day, 21-day loans does not give correct information about your financial behavior.”
Now you don’t have to wait for your credit score to be updated. From January 1 next year, banks and financial institutions will update credit scores as frequently as possible. RBI has announced this. Central Bank Governor Shaktikanta Das said on August 8 that credit data should be updated every 15 days. It can be updated on the 15th or last date of every month or Credit Institutions (CI) and Credit Information Companies (CIC) can agree on a particular date in this regard.
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Both the customer and the bank will benefit
Currently, Credit Institutions ( CI ) are required to provide customer’s credit information to CIC every month. Digital lending consultant Parijat Garg said that correct credit information is necessary for both taking and giving loans. Its prompt update is also essential. He said that fresh credit information is very important for banks and NBFCs. Manish Jain, Country Managing Director of credit bureau Experian India, said, “The data should be updated every week or every 15 days. If this is not done, the credit score that you see today in the era of 3-day, 7-day, 21-day loans does not give correct information about your financial behavior.”
Dynamic credit score will provide accurate information about the customer
The customer needs to understand that the credit score is not a fixed number that is calculated every month, every six months or once a year. It keeps changing constantly. When you apply for your credit report, it is calculated based on the data available then. Jain said that your credit score keeps changing according to your credit behavior, loans taken, loan repayment, loan defaults, etc.
Currently, it takes a long time for default information to be reflected on EMI
Today, if a person defaults on his EMI, it may take 60 days for it to appear in your credit report. If the loan lending companies or banks provide information about the customer’s credit information every 15 days, then it will start appearing in the credit report in 30-40 days. In such a situation, the impact on the credit score of the customer who defaults on EMI will be visible soon. The data of customers who make their payments on time will also start appearing in the credit report soon. This will increase the possibility of improvement in their credit score.
Action will be taken for not following the rules
Credit Information Companies (CIC) have to send a list of those credit institutions to RBI every 31st March and 30th September which do not follow the guidelines in this regard. According to RBI rules, if any CIC or CI does not follow the prescribed rules, then action can be taken against it.
