Come December, people will be able to get a free CIBIL report but only once a year. A few days ago at a seminar, Reserve Bank of India governor, Raghuram Rajan had spoken about possibility of a free credit report once a year so that the people can check for any discrepancies in it.
Now CIBIL is coming up with this offer and it is expected to be rolled out soon. But is it going to be the real thing? A complete CIBIL report can cost you around INR 550 approx. This includes cost for your score, a convenience fee and a cost for information report. Plus the government taxes are also added to this. If they decide to give the report free, it is most likely that they won’t give the famed CIBIL score free. So, the borrowers might just get a generic report stating what all your previous lenders have mentioned about your credit history. They would also be able to raise disputes if necessary if wrong information has been mentioned.
This would the biggest benefit of this move as in some cases; it is later found that there are some discrepancies in the credit report, which the borrower was never aware of. By the time it is known to the borrower it might be late, as he could have applied for a loan which would be dependent on CIBIL data based on an inadequate report. Lenders too will get a chance to keep their records up to date, with any mistakes being corrected by a check of the borrower.
Another benefit of this report would be an eye opener effect on those borrowers who do not take their finances easily. Once they have a report in hand which shows how much they owe they would make a conscious effort to improve their credit history.
But the CIBIL score would still elude borrowers in this report. Ideally a prospective borrower should have a CIBIL score of more than 750. With the spread of organized and accessible lending, the importance of credit ratings have increased, opening up a huge scope for raising awareness about the same.