RBI New Rule
CIBIL score is very important for getting loan. Reserve Bank of India has made a new rule in this regard. According to this new rule, the credit score of the customer will now be updated every 15 days.
Now customers have to do a little extra work to maintain their CIBIL score well or in other words, keep themselves in good financial condition at all times.
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This new rule will come into effect from January 1, 2025. If you don’t know this rule and your CIBIL score gets bad because of it, you will have to face difficulties to get a loan next time.
Who will be affected by this?
This can have a huge impact on customers who default on loan repayments, forget to pay EMIs on time. This will lower their credit score, making it difficult for them to get a loan next time.
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CIBIL will be updated every 15 days
Now, as per the new rules, the credit score of customers will be updated every 15 days. Banks and financial institutions should now update credit scores at the earliest, RBI said. RBI Governor recently announced that credit data will be updated every 15 days.
On what date will the data be updated?
Customer’s CIBIL score can be updated on and after the 15th of every month. If the Credit Institutions (CI) and Credit Information Companies (CIC) wish, they can also set certain dates as per their wish. Under which the data can be updated every 15 days. Credit institutions (CI) are required to submit customer credit information to CIC every month.
Both the bank and the customer will benefit
Both borrowers and lenders will benefit from this decision. Correct credit information is very important for both banks and NBFCs. This allows them to make better decisions about who to lend and who not to. This will also help in determining the interest rate charged on the loan. Customers with good credit scores can get loans at lower rates.
The number of defaults may decrease
If credit scores are updated every 15 days, banks will have accurate customer data. That means they will know which customer is good at repaying the loan and which is not. In such a situation, the bank can lend to the right customer at the right rate. This will also reduce the number of defaults.
Frequency of reporting of credit information by Credit Institutions to Credit Information Companieshttps://t.co/fhYszvlYyW
— ReserveBankOfIndia (@RBI) August 8, 2024
How to Improve CIBIL Score Quickly
1. Timely Payments
• Pay bills on time: Consistent and punctual payments demonstrate financial responsibility.
• Credit cards: Ensure full or minimum due payments are made before the due date.
• Loans: Adhere to the repayment schedule strictly.
2. Credit Utilization
• Credit card usage: Keep credit utilization (outstanding balance vs. credit limit) below 30% for optimal impact.
• Avoid maxing out cards: High utilization can negatively affect your score.
3. Credit History
• Maintain old accounts: A longer credit history positively impacts your score.
• Limit new credit inquiries: Excessive inquiries can lower your score.
4. Debt Management
• Manage debt effectively: High debt-to-income ratio can be detrimental.
• Consolidate debt: If feasible, consider consolidating multiple debts into one.
5. Dispute Errors
• Check credit report regularly: Identify and dispute any inaccuracies.
• Correct errors: Timely correction of errors can improve your score.
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