If a low CIBIL score has been blocking your access to bank loans, relief is on the way. The Reserve Bank of India (RBI) has announced sweeping reforms to make the credit reporting system faster, more transparent, and borrower-friendly. Effective January 1, 2025, these new regulations aim to accelerate credit score updates, provide borrowers a fair chance to rectify missed payments, and ensure clear communication in case of loan rejections.
Faster Credit Score Updates
Until now, banks and financial institutions reported credit data to bureaus such as CIBIL, Experian, Equifax, and CRIF High Mark only once a month, causing delays of up to 40 days in reflecting payments in your credit score. Under the new rules, all banks and NBFCs must update credit records twice a month—on the 15th and the last day. This means timely loan repayments or new credit activity will be reflected in your score far more quickly, helping borrowers rebuild their credit profile without long waits.
30-Day Grace Period for Missed EMIs
Previously, a single bounced EMI could instantly harm your CIBIL score. The RBI’s revised policy now requires lenders to give a 30-day notice before reporting a missed EMI to credit bureaus. Borrowers can use this window to make the overdue payment or correct any technical errors, preventing unnecessary damage to their credit profile. This applies across all loan types, including home, personal, vehicle loans, and credit cards.
Clearer Reasons for Loan Rejection
Vague explanations like “low score” will no longer be acceptable. Lenders must now provide written, detailed reasons for any loan denial. Additionally, if any error is found in your credit report, the lender or bureau must correct it within 30 days—failing which, the customer is entitled to ₹100 per day as compensation.
Free Annual Credit Report
All individuals will now be entitled to one free, full credit report every year from each major bureau. This empowers borrowers to monitor their financial standing, spot inaccuracies, and take corrective measures in time.
Faster Complaint Resolution
Credit-related complaints must now be resolved within 30 days. Delays beyond this period will attract a ₹100 per day compensation to the affected customer. Moreover, whenever a financial institution checks your credit score or report, you must be notified via SMS or email—strengthening transparency and preventing unauthorized inquiries.
Tips to Improve Your Credit Score
Even with these borrower-friendly reforms, the RBI stresses good credit habits:
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Always pay EMIs and credit card bills on time.
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Keep credit utilization below 30% of your card limit.
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Avoid frequent loan or credit card applications.
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Review your credit report at least once a year.
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Use secured loans like gold or FD-backed loans to build a positive history if needed.
A New Era in India’s Credit System
The RBI’s reforms promise faster score improvements, fairer reporting practices, and enhanced consumer protection. Borrowers will benefit from timely updates, opportunities to correct mistakes, and greater clarity in financial dealings. This marks a shift toward a more transparent, accountable, and consumer-centric credit ecosystem—one where timely action and financial discipline can directly unlock better loan approvals and interest rates.
If you’re planning a major loan in the near future, now is the time to focus on your CIBIL score. With prompt payments, smart credit usage, and regular monitoring, you can take full advantage of these new rules and strengthen your financial future.