The Reserve Bank of India (RBI) has mandated credit lenders to update the credit bureau records every fortnight, starting from January 1, 2025. So far the credit report is updated in a monthly cycle. According to RBI, the new regulation will prove to be more accurate in reflecting the financial record of the borrower.
Demerits of old system
In monthly basis updates, the borrower's payment is reflected with delay in the bureau's record. It led to inaccurate capturing of the repayment behaviour of the borrower. Because of this, the borrowers often face hurdles in getting an updated credit score on time, ultimately, affecting their financial record.
Merits of 15-day cycle
Given the demerits of the older system, the new 15-day cycle will ensure faster updates, and reflect a more precise picture of borrowers' finance handling capabilities. From creditors' perspective, it will also help them to analyse the financial condition of a person more accurately while dealing with a loan application.
Both the lenders and borrowers can make well-informed decisions with timely updates. The consumer would also get empowered with the latest update. The biggest advantage of a 15-day cycle would be for those who want to close their credit accounts. So far, the borrower has to wait for over a month to get a closed account reflected in their credit report.
By that time, the credit score remained the same despite all the settlements. With a 15-day cycle, this time would be significantly reduced making the borrower free to make the next financial decision for himself.
