RBI New Rule: The Reserve Bank of India (RBI) has recently made a big change in the credit reporting system. Under the new rules, now banks and financial institutions will have to update the data to the credit bureau every 15 days, whereas earlier this process used to happen once a month. These new guidelines have come into effect from January 1, 2025.
Effect of new rules
With this change, the process of calculating and updating the credit score will become faster and more accurate. Earlier, delays in updating loan repayment information could have a negative impact on the credit score of borrowers, causing problems in taking new loans. Now the 15-day reporting period will eliminate this problem and borrowers will soon see an improvement in their credit score.
What does 15-day reporting mean?
- Credit score will be updated quickly – Now if a person pays loan or credit card on time, his credit score will improve quickly.
- Banks will get accurate data – Banks and financial institutions will be able to take decisions based on more accurate and recent credit information before giving loans.
- Default and loan fraud will be controlled – Earlier there could be a delay of up to 40 days in monthly reporting, due to which banks could take wrong decisions. Now this process will be faster and the financial behavior of borrowers can be monitored better.
- Ban on evergreening – ‘Evergreening’ where a new loan is taken to repay the old loan, the new rule will also curb it and the loan will be evaluated correctly.
Categories of credit score
Credit score ranges from 300 to 900, and a score above 700 is considered good.
- Score – Category
- 300–579 Poor
- 580–669 Average
- 670–739 Good
- 740–799 Very Good
- 800+ Best
Benefits of new rules of RBI
- Credit score will be updated faster – Borrowers who make payments on time will get a better credit score soon.
- Banks’ decision-making ability will increase – Now banks will get updated data within 15 days instead of looking at old data. Check your credit score regularly and immediately file a complaint with the credit bureau to correct any mistake.