Credit Score: Your credit score matters a lot today. If this score is good, you will get a loan immediately. If it is not good, you will have to struggle a lot to get a loan or borrow money from anywhere. Reserve Bank is making such arrangements that your credit score will be updated every fortnight. Currently, it is updated every month.
Mumbai: Now your CIBIL-like credit score will be updated faster. Yes, the Reserve Bank of India (RBI) has made an important announcement regarding credit information. RBI Governor Shaktikanta Das has suggested that lenders should now provide credit information reports like CIBIL to credit information companies (CIC) every two weeks.
Everyone will be comfortable
After the Monetary Policy Committee or MPC meeting on Thursday, Governor Shaktikanta Das emphasized that timely disclosure of credit information would be beneficial for borrowers. He said, ‘The fortnightly reporting frequency will ensure that more recent information is reflected in the credit information report provided by CIC. This will be beneficial for both borrowers and lenders (CI). Borrowers will get the benefit of faster update of information, especially when they have repaid the loan. Lenders will be able to do better risk assessment of borrowers and also reduce the risk of over-lending by borrowers.’
Change now on monthly basis
In his speech, the governor said, “The availability of accurate credit information is important for both lenders and borrowers. Currently, lenders are required to report to credit information companies (CICs) on a monthly basis or at such shorter intervals as may be agreed between lenders and CICs. It is proposed to increase the frequency of reporting of credit information to a fortnightly basis or at shorter intervals. As a result, borrowers will benefit from faster updates of their credit information, especially when they repay their loans. Lenders, on their part, will be able to make a better risk assessment of borrowers.”
Frequency of reporting of credit information by Credit Institutions to Credit Information Companieshttps://t.co/fhYszvlYyW
— ReserveBankOfIndia (@RBI) August 8, 2024
Individuals will benefit
What impact can this development have Experts say that individuals will benefit from this development as good credit behaviour will be reflected faster with the implementation of this change. Satish Mehta, Founder, Athena CreditExpert says, “This in turn will equally help lenders by providing more recent data, enabling them to make better informed credit decisions.”
What is a credit score
A credit score is a 3-digit number of a person’s credit history. When you take any kind of loan or credit from the banking channel, the bank first checks your credit score. Simply put, it reflects your borrowing or loan repayment habit and a person’s creditworthiness and financial position in banks.
What should be a good credit score
Experts say that a good CIBIL score should be between 700 and 900. If a person has a good CIBIL score, he is more likely to get a higher loan amount at a lower interest rate. CIBIL has access to credit information of about 600 million people. At present, it has about 2400 members which include all types of lenders.
