The major cause of a bad CIBIL score is delay in repayment of loans or bounce in EMIs. Other causes also contribute to the reduction of CIBIL scoring. To solve that, the Reserve Bank of India (RBI) has chalked out many ways regarding its CIBIL scores.
Knowing upfront about the benefits of an excellent score on your CIBIL will be very important. This advice is for those who have scored over 700 in their CIBIL scores. No bank will deny such a borrower. Not only that, but they will also offer better interest rates. Someone who has a score below 700 will be charged a higher interest rate.
To make the matter clearer, it must be noted that if your CIBIL score is below 500, though, then no bank or finance company will even consider lending you anything. Now let’s find out what are the newly updated rules by RBI in terms of the CIBIL score.
Credit score will be updated every 15 days
These new marching orders from RBI, in line with the update credit score requirement, states that banks and non-banking financial companies (NBFCs) will have to update the credit score of customers every fifteen days.
These will have to then relay said data to Credit Information Companies (CIC)every couple of weeks on whether their credit account was kept by consumers in paying anterior loan amounts. Information gained would then have been quickly updated by the CIC. This will be a very encouraging development for both banks and their customers.
From now onwards, the CIBIL score of all customers can be updated on the 15th and end of every month. Credit Institutions (CI) and Credit Information Companies (CIC) may also adopt a fixed date for updating the data at intervals of 15 days if they wish.
Know how banks and customers will benefit
According to the new information let us tell you, it states that though the RBI is establishing its new rule (New rules of CIBIL score), it is for the benefit of bank and the customer as well. By updating the credit score quite quickly, banks and non-banking financial companies (NBFCs) would be able to make better decisions on whom to lend and whom not to. In a case where a customer defaults, it will be known within 15 days.
Fast updates of the credit score for customers. Now, with this, all these will be given the opportunity for people with bad credit scores to know that their scores are improving or not. The risk appraisal of the good credit score people will be closer and, hence, they will be lent at lower interest rates.
