The formation of Credit Information Bureau of India (CIBIL) made bankers a happier lot. With CIBIL, credit history of borrowers is easily accessible to them and they can also take informed lending decisions now. Today, while CIBIL has managed to cover all major banks, certain hiccups have left borrowers in a tight spot.
In certain cases, due to improper functioning of banks, people land up in trouble. Like in this case a person was approached by a sales executive of a multinational bank with a credit card offer. He already had two credit cards and was not interested in another one. On hearing interesting features including cash back and discounts on shopping, he applied for the credit card.
After a month, he got a letter from the bank stating that his credit card application had been rejected because of a poor credit report from CIBIL. He didn’t understand why his application was rejected. The worrying factor for him was that the card had been rejected because of poor credit worthiness, whereas he had never defaulted in any payment.
The unfortunate part for him and most others, is that several times, they do not know the reason for rejection and end up running from pillar to post to find a solution.
These things lead RBI to take some action. In order to make make lending procedure transparent, secure and consumer friendly, The Reserve bank of India issued a guidance to banks to give to the customer, in writing, the reason for rejection. Many banks implemented it. The guidelines also say that in case a loan is rejected based on a credit report, banks need to share the credit report with the customer, if requested. The fees for the report should not be higher than Rs 50.
Customer protection
There are a few more things that customers should know so that they can effectively deal with such instances:
Before reporting default status of a credit card holder/borrower to CIBIL or any other credit bureau, banks should ensure that they issue sufficient notices to the customer about the intention to report him/ her as defaulter.
Banks should be particularly careful in the case of credit cards where there are pending disputes. The reporting should be made only after the dispute is settled.
If a customer has been reported to CIBIL, then a notice should be sent out to the customer which should mention the period within which such report will be withdrawn if the customer settles his dues
Banks should constitute Grievance Redressal machinery and appoint grievance redressal officers. The designated officer should ensure that genuine grievances of credit card subscribers are redressed promptly without involving delay.
If a complainant does not get satisfactory response from the bank in 30 days, the customer can approach the Banking Ombudsman for redressal of his grievance.
These provisions are more than enough to protect customers against wrong reporting of credit status. If you had been incorrectly reported, then approach the bank to access the credit report and resolve the problem. If that does not work, go to the Banking Ombudsman
However recently CIBIL has started giving Credit report directly to the Individuals.
You can request for the copy of your CIBIL report after completing the following formalities.
1. Write to CIBIL with the CIR Request Form duly filled in
2. Also mail self attested hardcopies of your Identity Proof1 and lastest Address Proof2 documents and Fees3 to P.O.BOX 17, Millennium Business Park, Navi Mumbai- 400710
3. Once CIBIL receives the documents and Fees3, your request will be processed and copy of your CIR will be dispatched to you.
Valid Identity Proof: PAN Card/ Passport/ Voters ID (Mail self attested hard copy of any one of these Identity Proofs)
Valid Address Proof: Latest Bank Account Statement/ Electricity Bill/ Telephone bill (Mail self attested hard copy of any one of these Address Proofs)
Payment terms: Demand Draft (DD) of Rs 142/- (inclusive of all taxes and express delivery charge) , in favour of Credit Information Bureau (India) Limited payable at Mumbai. Please note that the fee once paid is non-refundable.
If you have existing credit accounts or have recently applied for a credit facility, please submit identity and address details that have been submitted to the relevant credit institution/s. This will help provide you with more consistent information.
Your CIBIL CIR will be presented to you in a simple and easy to understand format. However, on receiving your CIBIL CIR, if you require any explanation/clarification, you can email them at consumerqueries@cibil.com.
All your correspondence to CIBIL must be sent through Indian Post only
What we all should take care of in order to avoid any unnecessary hassle of getting reported in CIBIL
Always insist for No Dues letter from the bank post closure of the loan. Please note that do not consider any loan closed till the time you have No Dues Certificate or No Objection Certificate from the bank.
In case of a specific problem related to default, Customer should additionally mention the type of account or card, reference date and reference amount related to dispute or discrepancies. CIBIL doesn’t take note of any information from any person other than banks. So discrepancy / dispute should be settled with bank first and then it will send report to CIBIL. Once the matter is resolved, customer can take the letter from bank that no due is outstanding and it will be reported to CIBIL. If bank is not helping to resolve the problem, customer can go to Banking Ombudsman and / or Consumer court.
CIBIL report doesn’t show the loans where you are guarantor or add on credit cards issued on your credit card.
In case if you find any surprises – i.e. loans or credit card open in your name, get it cleared with bank and get confirmation in writing. Only bank can send the details to CIBIL to correct details.
As closer date of loans or credit card is not always appearing on CIBIL report, banks may presume all loans and cards open and reject your new loan application. It is advisable for applicant to report all open credit cards and loans to avoid such situation.
Remember, only we would be loser even if we are victim of misreporting by bank. As per current norms banks are not penalized for error in reporting to CIBIL. Most of the time you would know about your CIBIL report when you apply for any loan and remember that bank will reject your loan and you would not be in a position to reapply without getting your records rectified from your bank, which would take atleast 1 month.
I urge the RBI to penalize the banks for misreporting/erronous reporting due to which a consumer suffers unnecessarily.
