Wednesday, 5 April 2017

Why Free Credit Reports are not so free in India?

Effective from 1st January, 2017, every single credit bureau of India has to provide one free full credit report (FFCR) per financial year to any person who has a credit history without any charge when requested by the individual. This is a result of a new rule implemented by the Reserve Bank of India (RBI).
Currently, there are four major credit bureaus of India viz. Transunion CIBIL Ltd., Experian Credit Information Co. of India Pvt. Ltd., Equifax Credit Information Services Pvt. Ltd., and CRIF High Mark Credit Information Services Pvt. Ltd. Thus, you can get up to four free credit reports every financial year without paying anything. Sounds amazing, right? However, the reality is quite different.
Before we jump to how the RBI policy has changed the structure of working, let’s take a look at the basics first.

What is a CIR?
CIR, or Credit Information Report is a formal report maintained by all the credit bureaus of India, which contains the details of your credit history. For instance, you can find our bank account details, loan and payment history details, etc. apart from basic personal information. When you apply for a loan or a credit card then the financial institution requests for your credit report from their partner credit bureau, based on which they decide whether or whether not to approve your loan application. CIBIL, which is the most prominent credit bureaus of India, states that more than 70% of the loans sanctioned are for the individuals who have a CIBIL score greater than 750 (the CIBIL score ranges from 300 to 900).

The Reality of free Credit Report
RBI has ordered all the credit bureaus of India to put the process of getting a free credit report for their customers on their respective websites, and they have followed so. However, the actual process varies from one credit bureau to another. Let’s take a look at a few of them:
Equifax
Equifax has clearly displayed a link for the free credit report process on their homepage http://www.equifax.co.in/home/en_in. You can directly jump to the page by clicking this link.  The entire process is simplified through the following steps:
·        Download Equifax App on your Android or Apple phone.
·        Login to the app by providing your email address and a temporary PIN which will be sent to the email address itself.
·        Provide personal information and Aadhar card for verification, after which you need to provide an OTP sent on your registered mobile no.
·        Once authentication process is completed you will get your free credit report within 2 days.

CRIF High Mark
Just like Equifax CRIF has also put a link for the free credit report process on their homepage www.crifhighmark.com. You can start the process by logging in with your credentials and then filling out a form with some basic details. You will also need to provide your UID or PAN for verification. The details will be confirmed by the company in a few days after which you can activate your account and get your free credit report within a few more days.

Transunion CIBIL
CIBIL has put a link to free CIBIL report on their homepage www.cibil.com but rather at the bottom, thus making it easier to overlook. Using the link you can go to the page where you can download a required form. You can fill out the form and mail it to the company along with your KYC documents at your own cost. According to the FAQ section you can get your free CIR within 7 days of the form submission.

Although the RBI has mandated the credit bureaus to provide free credit reports to their customers it is clear that the process has not been made convenient at all. In fact, many people have claimed long delays in receiving their reports. Thus, RBI should perform a check on how well the new rule has been practiced by the credit bureaus and how the customers can avail the free CIBIL report service easily. 

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