Credit Score: Quick update of credit score will benefit both the bank and the customer. RBI has presented a proposal in this regard on August 8. It says that credit institutions and credit information companies should create a system by mutual consent for quick update of credit score
Credit Score: Now you will not have to wait for your credit score to be updated. From January 1 next year, banks and financial institutions will update the credit score as soon 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 among themselves about any one date in this regard.
Both the customer and the bank will benefit
Currently, it is necessary for credit institutions (CI) to give the 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. It is also important to update it quickly. 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, then in today’s era of three-day, 7-day, 21-day loans, the credit score you see does not give correct information about your financial behavior.” Dynamic credit score will give correct information about the customer Customer needs to understand that the credit score is not a fixed number, which is calculated every month, every six months or once a year. It keeps changing continuously. When you apply for your credit report, its calculation is done on the basis of the data available then. Jain said that your credit score keeps changing according to your credit behavior, loans taken, loan repayment, loan default, etc.
Now it takes a long time for the information of default on EMI to be included
Today, if a person defaults on his EMI, it may take 60 days for it to appear in your credit report. If the loan giving 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 effect of the customer defaulting on EMI will start showing soon on his credit score. The data of customers who make their payments on time will also start appearing soon in the credit report. This will increase the possibility of improvement in their credit score.
Action will be taken for not following the rule
Credit Information Companies (CIC) have to send a list of those credit institutions to RBI every 31 March and 30 September which do not follow the guidelines in this regard. As per RBI rules, if any CIC or CI does not plan as per the prescribed rules then action can be taken against them.
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