RBI takes notice as consumers suffer due to faulty credit scores

Gaurav Tyagi

10 reads

Gaurav Tyagi

10 reads

From clerical errors to cybercrime, there’s no dearth of causes when it comes to inaccurate credit reports. Getting these reports fixed, however, can be both expensive and time-consuming thanks to a system that is as opaque as it is slow.

July 18, 2023

10 MINS READ

Key Takeaways

Tens of thousands of Indians each year are finding that their credit scores have tanked due to loans they never took.
Sometimes, these loans are the result of bad actors using stolen IDs to illegally avail credit. In other cases, it’s simply a clerical error
Regardless of the cause, however, getting a credit report fixed is both expensive and time-intensive
Last month, the RBI fined 4 credit bureaus for inaccurate credit data and delays in rectifying incorrect information. Credit bureau executives, though, point the finger at banks

A credit score is a powerful thing. A high enough score affords you access to cheap and easy finance. A low enough score, however, effectively excludes you from accessing traditional finance altogether. In some cases, such as public bank jobs, candidates can be disqualified from selection simply on the basis of their credit scores.

Sushant M found this out the hard way when he applied for a car loan from a nationalised bank earlier this year. Despite Sushant being employed as a data engineer at a multinational tech services firm, the bank rejected his loan application outright. His credit score, the bank said, was extremely low due to a foreclosed loan account from four years ago that was linked to his personal account number (PAN)—a unique alpha-numeric identifier assigned by India’s Income Tax department.