5 New RBI Rules That Will Change CIBIL Score Reporting

In 2025, the Reserve Bank of India (RBI) introduced some important reforms that would impact the CIBIL score and overall credit reporting system. These modifications will likely change how lenders evaluate creditworthiness and how borrowers maintain their credit histories. This guide will help you understand the five new RBI rules that will impact CIBIL score reporting.

5 RBI Rules Changing CIBIL Score
 

To improve the speed, accuracy, and transparency of credit reporting, the Reserve Bank of India has implemented significant changes. Here are the 5 RBI rules that will affect your CIBIL score.

1.    Bi-Monthly Credit Reporting Requirement
Effective from January 1, 2025, the RBI requires all lenders to update credit bureau records every 15 days, precisely on the 15th and last day of each month. By ensuring that borrowers' credit data is up-to-date, this change enables a more recent and updated representation of their credit behaviour through the CIBIL score. 

This implies that positive actions, like paying EMIs on time, can improve the CIBIL score more quickly, while defaults or delays are also reported sooner.

2.    Real-Time Notifications for Credit Activities
Most borrowers are unaware that multiple credit report pulls by lending institutions can decrease their CIBIL score. Also, if the borrowers can’t repay the credit on time for any reason, it would lead to a decrease in their CIBIL scores.

For the betterment of the borrowers, RBI, under its new rule, has demanded that all the credit bureaus send real-time notifications (through SMS or email) whenever their credit information is accessed. Also, if borrowers are about to default, lenders must send them a warning before reporting it to credit bureaus, giving them a final opportunity to take corrective action and maintain a good CIBIL score.

3.     Standardisation of Data Reporting Formats
The RBI has directed all lenders, including banks, NBFCs, and credit card issuers, to become members of all four major credit bureaus (TransUnion CIBIL, Experian, Equifax, and CRIF Highmark) and follow a standardised data reporting format. 

By following this new RBI rule, lenders can ensure that a borrower’s credit history is reflected consistently and accurately. This results in a more precise and updated credit score, which helps borrowers take measures to increase or maintain their scores and provides lenders with a true picture of a borrower's creditworthiness.

4.    Free Credit Reports Every Year
Every year, credit bureaus are required to give borrowers one free complete credit report. A link to this report should be available on the credit bureau's website. Borrowers can now examine their credit history and better understand their financial situation, thanks to this new rule. 

Regularly examining the credit report enables borrowers to spot any inaccuracies or errors and, if required, take appropriate action to improve their CIBIL score.

5.    Accelerated Grievance Resolution and Loan Rejection Reason Mandate
Credit bureau dispute handling was usually slow and unclear. Bureaus have, up until now, categorised user grievances as requests, inquiries, or communications. Now, as per the RBI’s new directive, any grievance raised by a borrower must be treated strictly as a formal complaint by both lenders and credit bureaus. 

If a borrower raises a complaint with a credit bureau (like CIBIL) and it is not resolved within 30 days, the credit bureau must compensate them with ₹100 for each day of delay beyond that period.
As credit bureaus need information from lending institutions, the RBI has directed lenders to provide all the necessary information within 21 days of receiving the request. If a lender doesn’t respond within these 21 days, they’ll face the same penalty of Rs. 100 per delayed day.

Additionally, lenders have been asked to provide a clear, specific reason if they reject the loan or credit card application of any borrower. They can no longer provide unclear or generic reasons for credit rejection.

How do the New RBI Rules Impact Borrowers?

Here are several implications for borrowers:

●    Improved Credit Score Accuracy: Borrowers' credit scores will better represent their present financial behaviour if they are updated more frequently.
●    Greater Transparency: With clear reasons provided by the lenders for credit rejections and standardised data formats, borrowers can easily understand how their credit behaviour is assessed.
●    Faster Dispute Resolution: Credit report inaccuracies are quickly corrected because of the compensation mechanism for late resolution of disputes.
●    Better Access to Credit Information: With easier access to credit reports, borrowers can check and manage their credit profiles effectively.

Tips for Borrowers to Leverage the New RBI Rules

To gain the maximum from the recent RBI rules for the credit system, borrowers should do the following:

●    Regularly Monitor Credit Reports: Use the free yearly credit reports to keep track of the credit situation.
●    Address Discrepancies Promptly: If you notice any discrepancies in your credit report, initiate a dispute quickly for timely resolution.
●    Maintain Healthy Credit Practices: To establish and maintain a solid credit profile, make sure you always pay your bills on time, have a low credit utilisation ratio, and prevent making unnecessary credit queries.

To Conclude

With the credit reporting reforms, RBI has taken an important step toward a more accurate, transparent, and user-friendly credit system. Borrowers can take charge of their financial futures and make wise credit decisions by being aware of and leveraging these changes. In addition to helping individual borrowers, these reforms also support the general well-being and integrity of India's financial system.

With the new RBI rules, helping improve your CIBIL score, this is the perfect time to plan your next financial move. Get a Personal Loan from Poonawalla Fincorp and benefit from speedy approvals, reasonable interest rates, and flexible repayment plans to achieve your financial goals.

FAQs

What will be the impact of bi-monthly credit reporting on people with no credit history?
With bi-monthly credit reporting, first-time borrowers can build a credit history quickly, as timely payments on small loans or credit cards will reflect quickly in their CIBIL report. This will help them generate a credit score faster.

Will my pre-approved loan offers be affected by these new regulations?
Yes. Your credit profile is updated more frequently because lenders share data with credit bureaus more quickly. This gives lenders access to your most recent credit data, making your pre-approved credit cards or loan offers more precise, personalised, and aligned with your current eligibility.

What will be the impact of the new RBI rules on joint loan accounts or co-borrowers’ CIBIL scores?
All co-borrowers will now see updates to their joint loan accounts more quickly. This implies that everyone's CIBIL score improves sooner if one co-borrower makes on-time payments, and that delays have an equal impact on all scores.

Do these new RBI rules only apply to banks, or do they also apply to NBFCs and fintech lenders?
All Credit Institutions (CIs), including banks, NBFCs, housing finance firms, and even online lenders, are subject to them. The 15-day reporting period and data standardisation requirements must be met by each CI.

How will these rules affect people who recently closed a loan or credit card?
Your loan closure or credit card cancellation will now reflect in your credit report much faster, typically within 15 days, reducing the chances of your credit score showing an outdated outstanding balance.