CIBIL : The Reserve Bank of India (RBI) has recently made a major change in the credit reporting system. Under the new rules, now banks and financial institutions will have to update the data to the credit bureau every 15 days, whereas earlier this process was done once a month. These new guidelines have come into effect from January 1, 2025.
impact of the new rules
This change will make the process of calculating and updating credit scores faster and more accurate. Earlier, delays in updating loan repayment information could have a negative impact on borrowers’ credit scores, causing problems in getting new loans. Now the 15-day reporting period will eliminate this problem and borrowers will soon see an improvement in their credit scores.
What does 15-day reporting mean?
Credit score will get updated quickly – Now if a person makes loan or credit card payments on time, his credit score will improve quickly.
Banks will get accurate data – Banks and financial institutions will be able to take decisions based on more accurate and recent credit information before disbursing loans.
Default and loan fraud will be controlled – Earlier there could be a delay of up to 40 days in monthly reporting, due to which banks could take wrong decisions. Now this process will be faster and the financial behavior of borrowers can be monitored better.
Ban on Evergreening – The new rule will also curb ‘Evergreening’, where a new loan is taken to repay the old loan, and the loan will be properly evaluated.
Credit score categories
Credit scores range from 300 to 900, and a score above 700 is considered good.
Score – Category
300–579 bad
580–669 average
670–739 good
740–799 very good
800+ Best
Benefits of the new rules
Faster credit score update – Borrowers who make their payments on time will get a better credit score soon.
Decision making ability of banks will increase – Now banks will get updated data within 15 days instead of looking at old data. Check your credit score regularly and immediately lodge a complaint with the credit bureau to rectify any mistakes.
