The Reserve Bank of India has announced new rules for credit bureaus and lenders aiming to enhance consumer protection and improve the overall credit reporting process. Let’s look into the key facets of the new rules that will positively impact consumers.
Fortnightly reporting
One of the most notable changes is the implementation of standardised reporting cycles. Lenders must submit credit information to the bureaus in a new uniform format. The data updates must happen at least twice a month, within seven days of the 15th and last days of each month. The data must be ingested by the bureaus within five days of the deadline. This updated frequency will ensure that consumers’ credit histories reflect their most current financial status.
Moreover, bureaus will monitor compliance with these timelines and bi-annually report any lenders failing to meet these standards. By ensuring that all repayment activities are recorded promptly, consumers and lenders both, can avoid potential misunderstandings, leading to more informed decisions.
Standard score format
All bureaus will now report scores in the 300-900 format. Moreover, each consumer will receive a single credit report, regardless of multiple addresses or accounts, thus streamlining their credit situation. Bureaus must also include comprehensive details about co-borrowers and guarantors in these reports. This inclusion helps lenders assess risk more accurately when evaluating loan applications. Consumers will also have the right to add their comments directly to the report. Such measures not only protect consumer interests but also promote fair lending practices.
Rs 100 per day penalty
To bolster consumer service and grievance redressal mechanisms, several operational changes have been introduced. Bureaus are now mandated to send alerts via SMS or email whenever a consumer’s credit history is accessed or updated. This will ensure that consumers are informed about who is reviewing their credit information. Lenders must establish dedicated points of contact for addressing customer grievances swiftly. They are also required to communicate reasons for any rejection of data correction requests clearly.
A compensation framework has been established for consumers whose complaints are not resolved within 30 days, in which the bureau itself must respond within 21 days, leaving the lender with at least nine days. Consumers will be entitled to `100 per day after the 30th day until resolution, providing an incentive for timely action from both lenders and bureaus.
This shift means your credit score could change multiple times a month,
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