Credit Bureaus Mandated To Rectify Inaccuracy, Error or Discrepancy in 30 Days: Govt

Moneylife Digital Team 31 March 2022

Investor Interest

Credit information companies (CICs) or credit bureaus are mandated to share corrected particulars with the specified user or individual within 30 days, the Union government informed the Rajya Sabha.

In a written reply, minister of state for finance Dr Bhagwat Karad says, "As per the rules framed under the CIC (Regulation) Act, if a CIC discovers of its own or is informed about any inaccuracy, error or discrepancy in respect of the credit information maintained by it, the CIC is required to send the intimation of the same within seven days to the specified user or individual; to take immediate steps to correct the same and to forward the corrected particulars to the specified user or individual within 30 days from the date when the same was discovered by or reported to the CIC."

Dr Vikas Mahatme, a member of Parliament (MP), has asked for information about the number of days required for dispute resolution and updation of information in the records maintained by CIBIL or other credit bureaus.

The Reserve Bank of India (RBI) has allowed four CICs, namely, TransUnion CIBIL, Equifax, Experian, and CRIF High Mark to operate as CICs.

Sharing inputs received from TransUnion CIBIL, Dr Karad says, to expediate the process, the CIC has implemented online dispute resolution process (DRS), an automated process for dispute resolution to enable consumers to raise their concerns and for credit institutions to review the consumer concern and respond to it. (https://www.cibil.com/consumer-dispute-resolution )

However, due to lack of knowledge or guidance, many consumers fall prey to agencies that promise quick solutions for improiving credit scores and rectifying credit history.

If a borrower defaults on any re-payments/ EMIs, this will reflect a default on the credit information reports. The prudent path would be to ensure that the borrower uses loans or credit cards wisely and repays on or before the due date.

And there are no quick-fixes either. The borrower needs to clear the old loans with interest to have a clear credit record or needs to settle it.

There are some basic facts about credit scores and credit bureaus like CIBIL.

CIBIL credit score ranges between 300 and 900 and indicates the probability of default. There are four essential components with different weightage in a CIBIL credit score. Past performance has a weightage of 30%, while credit type/duration and leverage have a weightage of 25% each. The balance 20% weightage is based on other factors.

Credit institutions or banks and lenders submit your credit account details and personal, contact, employment information like name, address, date of birth, PAN, telephone number, and income to credit bureaus. This data submission occurs periodically (like the 1st or 15th day of every month) as decided by the credit institutions or banks and lenders and the credit bureau.

A credit bureau like CIBIL then creates your complete credit profile basis these details. This, in other words, means CIBIL cannot make any change directly to your CIBIL report. Once the change is authorised and provided by the concerned credit institution, CIBIL can update your credit report.

You can read the resources we have on Moneylife Foundation's Credit Helpline to understand a credit score and the consequences. Here is the link http://www.freecredithelp.in/faq/

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