CIBIL's Credit Information Report carries a lot of value. It is essential that those contributing to it act in the interest of consumers

‘Credit' has become a way of life. Improved lifestyles and increased needs are contributing towards this rapid credit off-take. Though it has its advantages, it has also resulted in delinquencies, because, earlier, banks, non-banking financial companies, financial institutions and credit card companies offered loans without an idea about the repaying capacity of the individual. Subsequently, they had a tough time recovering the same.

The consumer, on his part, took loans from many organisations at a time without figuring out his financial capability, and landed in deep trouble.

There was, therefore, a need to streamline this; this resulted in the formation of the Credit Information Bureau (India) Limited (CIBIL), in 2000. CIBIL'S objective is to minimise defaulters, help financial institutions make informed lending decisions,thus maximising quality credit penetration.

CIBIL maintains a comprehensive Credit Information Report (CIR), an information database pertaining to borrowers. It is a record of the borrower's credit payment history, compiled from the details provided by different credit grantors.

However, CIBIL does not verify the accuracy, completeness and authenticity of the credit information; it only collates the details given by the respective institutions.

Vital tool

In recent days, CIBIL's credit information report is a vital tool for banks and financial institutions; credit sanctions are based on these. Any loan or credit card application is processed only if the CIBIL report gives a clean chit. We hear instances where even placements are finalised after checking with CIBIL. Therefore, it is crucial that credit grantors maintain and update correct information about their borrowers on a regular basis with CIBIL; otherwise, the consumer will face great difficulty.

We received a complaint recently where a credit card company had been asking Madhav to subscribe to their card. But, despite submitting the relevant papers, his application was rejected, as he was found to be a defaulter as per the CIBIL report.

He had applied for a car loan at the same time; that too was denied on the same grounds. Since he had always settled his dues on time, Madhav was perplexed.

Thankfully, in a consumer-friendly measure, CIBIL allows people to access their credit information report.

Madhav applied to CIBIL for the report, with the required fees, and was shocked to find that the personal loan he had taken with an NBFC a few years ago, and settled too, was reflected as pending.

On checking with the NBFC, he found an entry dated 2005 saying his cheque for a sum of Rs. 1,600 had bounced. However, when Madhav verified with his bank statement, he found that the amount was debited to his account the same month.

But, the NBFC had continued to maintain Madhav's due as pending in the CIR.

Madhav approached us, and wrote to the NBFC demanding immediate resolution. He is awaiting a response. Since the CIBIL report carries great value, it is essential that banks and other financial institutions realise their responsibilities and act conscientiously.

(The writer works with CAG, which offers free advice on consumer complaints to its members. For membership details/queries contact 24914358/24460387 or

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