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The Reserve Bank of India (RBI) has mandated all lenders to update credit bureau records every 15 days, effective January 1, 2025.
The apex bank bets on these directions to establish a standardised framework for reporting and dissemination of credit information; safeguard the confidentiality and security of sensitive credit data; provide mechanisms for consumers to access their credit information and grievance redressal on matters related to credit information reporting.
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The new 15-day reporting cycle means that timely payments or defaults will be reflected in the credit score much more rapidly, enabling lenders to make decisions based on current financial behavior.
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With this new 15-day rule in place, borrowers who manage their payments diligently, this could lead to a quicker improvement in their credit scores.
Under the new mechanism, lender will have access to more current credit information, and will be in a better position to assess credit risk.
The RBI said it observed that the CICs are sharing credit information based on consent of an individual, with entities which are not SUs, by entering into an agreement with such entities.
Given the sensitivity and possible misuse while sharing such credit information, the CICs shall put in place a suitable mechanism for the purpose.
To make the assessment process more transparent, the RBI said the CICs shall send alerts through SMS/ email to customers when their CIR is accessed by the SUs, wherever mobile number/ email ID details of the customers are available. The alerts shall be sent by CICs only when the CIR enquiry reflects in the CIR of the customer.
Missed payments or defaults may take up to 40 days to appear with the old monthly reporting system.
This disparity often resulted in lenders receiving outdated information, leaving a chance for making a wrong judgment over the borrower’s creditworthiness.
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