Beginning January 1, 2025, the Reserve Bank of India (RBI) has compelled credit lenders to update credit bureau records every fortnight. So far, the credit report is updated once a month. According to the RBI, the new regulations will be more precise in reflecting the borrower’s financial record.
Negative aspects of the previous system in RBI
In monthly updates, the borrower’s payment is delayedly reported in the bureau’s record. It resulted in an erroneous representation of the borrower’s repayment behaviour. As a result, borrowers frequently have challenges in receiving an updated credit score on time, impacting their financial records.
Benefits of a 15-day cycle
Given the shortcomings of the previous system, the new 15-day cycle will provide faster updates and a more accurate picture of borrowers’ financial management abilities. Creditors will be able to more correctly assess a person’s financial situation while dealing with a loan application.
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Lenders and borrowers may make informed judgements with timely updates. The consumer would also be empowered by the most recent update. The most significant advantage of a 15-day period is that it allows you to terminate your credit accounts. So far, the borrower has had to wait more than a month to get a cancelled account reported on their credit report.
Despite all of the settlements, the credit score had stayed constant by that point. With a 15-day cycle, this time would be greatly decreased, allowing the borrower to make the next financial decision on his own.
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