The Reserve Bank of India (RBI) has introduced several reforms to the CIBIL score system, effective January 1, 2025, with the objective of enhancing transparency, efficiency, and customer convenience in the lending process. These new measures are designed to facilitate easier access to credit for eligible borrowers by improving the process for updating and sharing credit information.
Enhanced Credit Score Updates and Loan Processes
Credit scores (CIBIL scores) will now be updated every 15 days instead of monthly, allowing borrowers’ most recent financial behavior to be reflected in their credit profiles more quickly.
Customers are entitled to receive timely notifications—via SMS or email—whenever a lender checks their CIBIL score, providing greater transparency and control over their credit information.
Financial institutions are required to verify a borrower’s credit score before sanctioning any new loan or credit facility. If the credit score meets the lender’s criteria, the loan is approved, and the customer receives prompt notification of the decision.
The loan application and approval process has been streamlined, enabling eligible borrowers to receive loans up to Rs 5 lakh more efficiently.
Consumer Rights and Free Access
All credit bureaus must provide customers with at least one free credit report per year. Consumers can access their full credit history and detailed report through a designated link on each credit bureau’s website.
In the event of a loan or credit card denial, lenders are obligated to disclose the reasons for rejection, thereby enabling customers to address any deficiencies in their credit profile.
Complaints and Grievance Redressal
Grievances related to credit reporting or score inaccuracies must be resolved within 30 days. If a resolution is not provided within this period, a penalty of ₹100 per day will be imposed on the responsible institution.
Banks have up to 21 days to respond to a complaint. Once the information is shared with the credit bureau, the bureau must resolve the issue within the following 9 days, ensuring timely closure and protection of the borrower’s interests.
Additional Provisions
Borrowers without an established credit history can now also access loans, as RBI’s updates aim to improve financial inclusion.
Customers will be kept informed of all actions taken on their credit information by both their banks and credit bureaus, enhancing transparency across the financial ecosystem.
These reforms reflect the RBI’s commitment to creating a borrower-friendly credit environment where information is timely, processes are efficient, and consumers are empowered to manage their financial standing responsibly.
Disclaimer: This analysis is for informational and educational purposes only. Please consult with certified professionals before making any decisions.
