The four credit bureau agencies we are talking about are TransUnion CIBIL, Equifax Credit Information Service, Experian Credit Information and CRIF High Mark Credit Information and all of these four have been fined from 24 lakhs to 26 lakhs. Now what incompleteness and inaccuracies in their data are we talking about?
This is an excellent move as far as I am concerned from both perspectives. A) According to the CICRA Act of 2004 is where all these credit bureaus came into existence, it is mandatory for every lender to update their data with the bureau once in 30 days but this is like a voluntary thing, there is no talk about any penalty there or no actionables if some XYZ borrower does not update his or her data.
Initially, I can understand that lot of lenders had problem because their data was an issue, but now we see that there are some banks which have not updated data for almost eight months, nine months.
One clarification and one thing I want to understand from you is the kind of data you are talking about. What kind of data are you talking about? The data that these bureaus get from the bank or the kind of data that in terms of complaints?
No, this is only the data that the lenders submit to the bureau. So, basically, okay let me get into little more detailing. So, basically what happens is every lender has to submit his or her data, their data once in 30 days as far as every borrower whether they have paid on time or not, whether there has been a delay, whether there has been a default. So, this data needs to get updated every 30 days.
So, it is this data which the credit bureau gets from the banks is processed with their algos and then is where our credit report gets generated wherein we all know about the credit score and good credit score, bad credit score and all of that, so which means if the data does not get updated for a year almost, then what happens is two things — whether somebody has been paying on time that does not reflect, if somebody has defaulted that does not get reflected, if somebody has managed to rectify their whole credit profile that also does not get reflected. So, we are basically seeing stale data and that has no meaning to anybody in the ecosystem.
Let us understand this from the viewer’s point of view. Now, if I want to dispute errors in my credit report, how do I do it and also the kind of inaccuracies that RBI has found out and these been asked to be rectified by the credit bureaus also, how will me as a user would know that I am a part of this inaccuracy and then how can I further go ahead and register a dispute?
Before I answer this question let me also clarify, this is also around the time where major issue happened because of these large PSU bank mergers that happened around the same time.
So, multiple banks, huge banks, data was all over the place which is where there was a delay and the statutory audit happened in March of 2021 as I mentioned just now and that is where this whole thing has happened. Today to answer your question, it is not that all is bad or all is lost. If you and I today write to either of the four credit bureaus saying that XYZ data is not updated, the chances of you getting a response in less than a week is almost 100% and then they in turn talk to the lenders and get your data updated and these days, another good thing that all the four credit bureaus are doing is each time you raise a dispute or there is an updation that is there, they are emailing you a soft copy of your own latest credit report free of cost. So, this is a huge positive.
So, only thing I would suggest is to check your credit report once in a year if not twice in a year, if you know that you have been borrowing or you have closed a particular loan or you disputed a particular loan or there was some issue with your data, identity theft or whatever that has happened, so it is good that when you check your report once in a year, you already know what is going on rather than look for water when there is fire.
So, do not go check your credit report only when you are choosing to apply for a loan or already you have gotten rejected by a lender because there is an issue with your credit profile. So, if you are hygienically doing this as part of your own personal compliance, then I do not see this as an issue and like I said if you raise a dispute, the response, the turnaround time is now less than seven days.
