Financial institutions (including over 700 banks) that are signed up with the Credit Information Bureau of India Limited (CIBIL) provide monthly credit transaction data to the Bureau.
However, consumers, who get to know details furnished when they access their reports for a fee (which is often only when a loan application gets rejected on the basis of this data), are not entirely in agreement with what is furnished.
Ten to 15 per cent of those accessing their reports dispute the data, according to Ms Harshala Chandorkar, Sr. Vice-President, Consumer Relations, Corporate Communication and CIC Compliance, CIBIL.
Consumers' interest in their Credit Information Reports and scores is growing, according to Ms Chandorkar.
The number accessing scores and reports runs into ‘thousands a day', and this number has grown by 30-40 per cent since the launch of online authentication three months ago (this eliminates the need for sending documents physically for verification).
CIBIL's Web site, which was re-launched recently, also has a feature for consumers to air their disputes.
Speaking to Business Line , Ms Chandorkar said: “All the disputes that come to us reach a closure. We raise the same with the bank that has furnished the data, and the Credit Information Companies (Regulation) Act, 2005 (CIC Act) mandates that any change that needs to be effected is done only when banks confirm the changes.”
CIBIL maintains data on over 200 million accounts, she added.
No validation
Complaints are aplenty on the Internet on inaccuracies in the data furnished to CIBIL by financial institutions and banks.
In one case, a 76-year old Bangalore-based consumer who had closed his car loan from a private bank taken four years ago (paid through pre-issued cheques), had a property loan rejected in 2009 for an outstanding amount on the previous loan.
In acknowledgement of the loan's closure, the hypothecation had been cancelled by the bank and the RC book returned, according to Mr S.K. Prabhakar Shetty, lawyer for the said consumer.
“I found out that an amount of Rs 50 (approx) was debited to his account after removal of the hypothecation. The amount would have since multiplied into Rs 1,000-plus, and that is now shown as ‘written off' in the records. This client has changed his car long ago and not bothered correcting the data (given his age) and opted for alternative means for funds. But there are many others whose data is inaccurate because there is no validation,” explained Mr Shetty.
When the lawyer approached CIBIL, he was informed that he and his client need to approach the bank that furnished the data, as that is the procedure. CIBIL does not take responsibility for the accuracy of the data, as these are furnished by the institutions handling the accounts.
Free reports to consumers
Acknowledging the credit bureau CIBIL's role, Mr G. Rajan, Secretary General, Consumer Association of India, pointed out that this is the only bureau in India that gives out credit reports to consumers.
“Usually, in the US, they give one free annual report to the consumers and the bureau sells the information to creditors, insurers, employers, etc. who are interested in knowing more about consumer's credit history,” said Mr Rajan.
In India, the report is available only to subscribers wanting to purchase the same. A marketing plan to improve consumer awareness is taking shape and will be rolled out in the next financial year, said Ms Chandorkar.
The CIBIL official added that inclusion of defaulters' data from telcos (as reported by some sections of the media) to compute credit scores is yet to be actioned, and will be subject to regulatory approvals.