The good news for those who have recently paid off a loan and are awaiting their CIBIL score to reflect the same is that the Reserve Bank of India (RBI) has passed an amendment regarding the timely CIBIL score updates, reflecting repayment history more quickly. This change has come as a huge savior for thousands of responsible borrowers who have otherwise had to wait for their credit records to catch up with their actions for quite some time.
What is a CIBIL Score and Why is it So Important?
Your CIBIL score is a three-digit number ranging from 300 to 900. It represents your creditworthiness, calculated based on your loan repayment habits, credit card usage, and overall financial discipline. This score plays a key role in determining whether you qualify for a loan, and at what interest rate.
| Score Range | Meaning |
|---|---|
| 750 and above | Excellent – Easy loan approval |
| 600 or below | Poor – High chances of rejection |
Borrowers’ Concerns and RBI’s Timely Intervention
Many had raised complaints that even after paying off the loans, their CIBIL scores did not change for months. The delay thus created would sometimes either prevent them from applying for new loans altogether or from getting new loans with higher interest rates.
The RBI has now duly recognized that the matter calls for urgent attention and a decisive intervention.
CIBIL Score Will Be Updated Every 15 Days as per the New RBI Rule.
According to the latest directive from Reserve Bank of India, banks and other financial institutions will now have to report all updated credit information to any Credit Information Companies such as CIBIL every 15 days.
- Thus what does it entail to you?
- You wwill soon find out that it reflects how you have paid your loans and the credits you use.
- You don’t have to wait for months to get that score improved.
That is making sure you plan the future loans or have some issues when applying for credit cards with confidence now.
Benefits for Quite an Array of Customers and for the Banks
- For the Customers:
Better loan eligibility due to timely updates of the score. - Lower interest rates for individuals with a good credit score.
- Better credit for emergencies or large purchases.
- For the Banks:
A rapid look into a borrower’s current ability to repay. - Instant loan approvals and disbursals which are fast and accurate.
- Reduced risk of lending to those applicants who do not qualify.