Recently RBI (Reserve Bank of India) has made a big change regarding CIBIL score Rule and credit score system. This will benefit crores of borrowers. Therefore, the Reserve Bank has issued instructions for all banks and financial institutions to compulsorily update the data of the credit bureau within 15 days. This rule has been started from January 1, 2025. Due to which now there is speed in the calculation of credit score. Before this change, this process happens once a month, due to which many problems had to be faced.
The main objective of this new change is to make the credit score system easy and instant. So that if a customer pays his EMI and credit card bill on time, it will be noted in the credit score immediately. So that customers can take another loan without any hassle. Also, the bank will also get help in taking the right decision. With this new change, the Indian financial system can become stronger.
Problems of the old credit score system
Before this new change, borrowers had to face many disadvantages due to the credit reporting system. This reporting used to happen once a month. Due to which there was a delay of up to 40 days and they had to wait. Due to which the credit score of those who pay their EMI on time was not improved immediately. Therefore, they had to face difficulties in taking a new loan. Because the bank used to take decisions on the basis of old data.
Benefits of new reporting
According to the new rule, now the credit reporting system has been made 15 days. With this change, now the credit score of the customers who pay EMI on time will be improved immediately. Due to which they will not have to face any problem to take a new loan. They will be able to get a new loan easily. Banks and financial institutions will get the right information and they will be helped in taking better decisions.
What is a credit score
Credit score is necessary for every person, which determines their financial status. The credit score ranges from 300 to 900. It has different categories. In which a score of 300 to 579 is considered the worst score. Customers with such credit score face difficulties in getting a new loan. Apart from this, if the score is 580 to 669, then the loan is available at a higher interest rate.
Also, a credit score between 670 to 739 and 740 to 799 is also good. Which shows the best situation to get a loan. Those with a credit score above 800 are given priority for giving loans, they get loans at the best interest rate.
Main benefits of new rules
This new change of RBI is going to benefit special borrowers. This change brings speed in the credit score system. Due to which customers who pay EMI installments on time will get great benefits. Also, banks and financial institutions will not need to see old data, it will help in taking quick decisions.