RBI's new CIBIL guidelines from January 2025: What borrowers must know

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Reserve Bank of India

The Reserve Bank of India (RBI) recently announced six significant changes to the rules surrounding CIBIL scores, all taking effect from January 1, 2025. These new guidelines aim to make credit reporting more transparent, accurate, and consumer-friendly. One of the most notable changes is that credit scores will now be updated twice a month, on the 15th and the last day of each month. This means borrowers can monitor their scores more frequently and take timely action to improve their credit standing.

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Credit report

Another key update is that whenever a bank or financial institution checks a customer's credit report, the customer must be immediately notified via SMS or email. This measure is designed to increase transparency and ensure individuals are always aware of who is accessing their financial information. This will help prevent unauthorized checks and keep consumers in control of their data.

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Loan Applicants

In a significant step, lenders must now disclose the specific reasons behind a loan rejection. If an application is rejected, the applicant must be clearly informed why – whether it's due to a low credit score, high debts, or any other factor. This will help individuals understand what went wrong and what steps they can take to improve their eligibility for future loans.

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Detailed Credit Report

The RBI has also mandated that all credit information companies must provide customers with one free, detailed credit report every year. This report should be easily accessible through a link on their official websites. The aim is to encourage people to regularly check their credit standing, verify any discrepancies found in the report, and rectify them before it impacts their financial health.

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Appropriate Action

Finally, consumers will now receive advance notice before being flagged as a defaulter. Lenders are required to send an alert, giving the borrower a chance to take appropriate action. Additionally, any complaints regarding credit reports must be resolved within 30 days, failing which the credit institution will incur a penalty of ₹100 per day. These customer-first policies are expected to significantly improve the credit ecosystem in India. 12th Pass Enough! Central Government Job Ready! Junior Assistant - Salary up to ₹63,200!