8 steps to know, if you are worried about your credit scores? Read about your rights ..

In April 2023, the Reserve Bank of India introduced measures to enhance the services provided by Credit Information Companies (CICs) and Credit Institutions (CIs). The goal is to ensure customers receive better assistance and address their grievances effectively.

If you recall, recently, RBI has penalized a few Banks for wrong reporting of your credit data with CICs especially in the Credit Card business segment.

In the exercise of the powers conferred in the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005), the Reserve Bank of India directs CICs and CIs to implement the directions as detailed below:

What you should know?

1. Notification of Credit Report Access

CICs will now send SMS or email alerts to customers whenever their Credit Information Report (CIR) is accessed by specific users (such as Banks, NBFCs, approved Fintechs, etc). This notification will be sent if the customer’s mobile number or email is available. CIs will notify customers through SMS or email when reporting default or Days Past Due (DPD) in existing credit facilities.

2. Nodal Points for Customer Grievances

CIs must designate a dedicated point of contact for CICs to handle customer grievances. They will share the contact details of this official with CICs and update any changes within five days.

3. Identifying Complaint Root Causes

CIs are now required to perform a Root Cause Analysis (RCA) of customer grievances at least semi-annually. This analysis will help them understand the reasons behind the complaints. The results of this analysis will be reviewed by top management annually.

4. Explaining Data Correction Rejections

If a customer’s request for data correction is rejected, CIs will explain the reasons for the rejection. A list of common rejection reasons will be provided by CICs to all CIs.

5. Review of Credit Report Matching Logic

CICs will periodically review their ‘Search & Match’ logic algorithm to provide Credit Information Reports (CIRs) for borrowers. Any issues identified during the RCA of complaints will be addressed by the Board of Directors of the CIC.

CICs shall have a board-approved policy for undertaking periodic review (at least on a half-yearly basis) of the ‘Search & Match’ logic algorithm implemented by them to provide a Credit Information Report (CIR) of a borrower.

6. Timely Data Ingestion

CICs will promptly ingest credit information data received from CIs into their databases within seven calendar days.

If data is rejected, CICs will communicate the reasons to the concerned CI within seven calendar days.

7. Disclosure of Complaints and Framework for compensation to customers for delayed updation/ rectification of credit information

CICs will publish details of complaints registered against them and CIs on their websites in a specific format.

Furthermore, the Reserve Bank of India directs CICs and CIs to implement the compensation framework for delayed updation/rectification of credit information by CIs and CICs.

You as Complainants shall be entitled to a compensation of ₹100 per calendar day if your complaint is not resolved within thirty (30) calendar days from the date of the initial filing of the complaint by the complainant with a CI/ CIC. The complainant can approach the RBI Ombudsman, under the Reserve Bank – Integrated Ombudsman Scheme, 2021, in case of wrongful denial of compensation by CIs or CICs.

8. Free Full Credit Report Access

CICs will provide individuals with easy access to their Free Full Credit Report, including their credit score, once a year. This will be prominently displayed on the CICs’ websites.

These measures will be implemented six months from the date of the circular.

Failure to comply may result in penalties as per the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005).

This initiative aims to provide better service and transparency for customers dealing with credit information.

Thank you.

Stay Updated, and Be Aware of your financial rights and obligations.

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