Now, claim compensation for delay in rectifying errors in credit reports

Prospective home loan borrowers should invest systematically to create their down payment corpus within five years.

Tired of waiting for credit information companies to rectify errors in your credit report? You will soon be able to claim compensation for any delay in updating your records.

Reserve Bank of India (RBI) governor Shaktikanta Das on Thursday announced measures to improve the grievance redressal mechanism of credit information companies.

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“With the increase in customer complaints regarding credit information reporting and the functioning of credit information companies (CICs), it has been decided to put in place a comprehensive framework for strengthening and improving the efficacy of the grievance redress mechanism and customer service provided by the credit institutions (CIs) and CICs,” the RBI said in its statement of developmental and regulatory policies.

These include putting in place a compensation mechanism for delayed updation and rectification of credit information reports. Borrowers will also receive SMS or email alerts whenever their credit reports are accessed. The credit information bureaus will now have to specify a timeframe within which data received from lenders will be included in their databases.

They will have to make disclosures on customer complaints received. They will now have to specify the number and nature of customer complaints received on their websites. The detailed guidelines will be issued later, the banking regulator said.

Earlier, credit information companies were included in the Reserve Bank-Integrated Ombdusman scheme.

Also read | Errors in your credit information report? File a complaint with RBI’s integrated ombudsman

Credit information companies compile repayment history and compute credit scores of individuals based on data received from lenders. Credit scores now play a key role in banks’ decisions around the approval or rejection of loan applications as also interest rates to be charged.

Erroneous credit reports and scores can be detrimental to individuals, as they could be deprived of, say, home loans they need or might have to pay much higher interest rates for no fault of theirs.