Borrowers facing loan rejections due to credit score issues will soon find a much-needed reprieve as the Reserve Bank of India introduces sweeping changes to the operations of Credit Information Companies (CICs). Effective April 1, 2026, these new regulations are designed to curb mismanagement and ensure more accurate credit reporting, thereby easing access to credit for millions.
The RBI’s draft proposal mandates a dramatic increase in the frequency of credit data updates by CICs. Instead of the current monthly cycle, these companies must now update information every seven days. This includes specific submission dates for credit scores to financial institutions by the 3rd of each month, ensuring banks have the most current data.
For individuals seeking loans, the most impactful change will be the accelerated timeline for rectifying any errors in their credit reports. What once took over 30 days to resolve will now be completed within a week. This swift correction mechanism ensures that positive financial behaviors, like timely EMI payments, are reflected rapidly, potentially boosting creditworthiness and unlocking better loan terms.
The statistics highlighting the problem are stark: a third of Indian loan applicants are denied credit due to their credit scores, and a staggering 50% of reports contain inaccuracies. The nearly 9.5 lakh complaints lodged against CICs in a single fiscal year underscore the extent of the issue.
In a significant move, the RBI has empowered itself to impose financial penalties on CICs for furnishing erroneous credit reports. This new enforcement measure aims to hold these agencies accountable for their data accuracy. This regulatory overhaul promises to transform India’s credit ecosystem, ending the era where inaccurate and outdated credit information hindered financial progress for countless individuals.