Incorrect credit score? Now you can file complaint with RBI

Now you can flag incorrect credit data reports to the Reserve Bank of India (RBI) if credit information companies fail to provide accurate information about your credit history on time. The Reserve Bank, in its monetary policy committee (MPC) announcement on Friday, says the central bank has decided to include credit information companies (CICs) under the Reserve Bank-Integrated Ombudsman Scheme (RB-IOS) 2021 and Introduction of the Internal Ombudsman (IO) Mechanism.

This means that if your credit score is not updated on time, as per the correct borrowing history, you can approach the RBI and file a complaint against such companies.

"The Reserve Bank - Integrated Ombudsman Scheme (RB-IOS) has improved the customer grievance redress mechanism. The turnaround time of grievance redress under RB-IOS has declined considerably," says the RBI governor.

He adds that to make the RB-IOS scheme more broad-based, credit information companies (CICs) will be included under the RB-IOS framework. He says that it'll be a cost-free complaint mechanism, and also directed CICs to have their own internal ombudsman.

There are four major credit information companies in India, including Credit Information Bureau (India) Ltd (CIBIL), Equifax Credit Information Services Pvt Ltd, Experian Credit Information Company of India Pvt Ltd, and CRIF High Mark Credit Information Services Pvt Ltd.

"This will provide a cost-free alternative redress mechanism for grievances against CICs. Further, with a view to strengthening the internal grievance redress by CICs themselves, it has been decided to mandate the CICs to have their own internal ombudsman (IO) framework," the RBI governor adds.

CICs are independent third-party institutions, which collect data on loans, credit cards, etc., from banks and other financial institutions. Based on the information they collect, a score is marked to a borrower, indicating if (s)he is a good or bad borrower. However, sometimes the information they gather could be wrong or it might not get updated on time, thus reflecting incorrect credit score and hampering your chances of getting a loan or getting it at a cheaper rate.

After the RBI move, these companies will have to update the correct information within 30 days, or the borrower can move the central bank.

The RBI's Reserve Bank- Integrated Ombudsman Scheme (RB-IOS) was launched on November 12, 2021. The scheme, which integrated the three previous Ombudsman schemes of the RBI, provides cost-free redress of customer complaints on deficiency in services by the RBI-regulated entities if they are not resolved to the customer's satisfaction in 30 days.

The scheme also includes non-scheduled primary co-operative banks, with deposit size of ₹50 crore and above. Under RB-IOS, a centralised receipt and processing centre has been set up at the RBI, Chandigarh, for receipt and initial processing of physical and email complaints in any language. The entities regulated by the RBI don't have the right to appeal in cases where an award is issued by the ombudsman against it for not furnishing satisfactory and timely information or documents.