How Wrong CIBIL report’s have harassed & destroyed many investors life ?

POSTED BY manish ON January 16, 2014 COMMENTS (57)

A few years back, India was introduced to the world of “Credit Bureaus” and “Credit Scores”. Credit Bureaus track an individual’s credit history and create a report from that data. So all your financial history including credit cards, loans, the timeliness and regularity of your repayments and the number of times you have sought credit, is captured in this single report, and based on all this information a score is generated. This data is shared with lenders on request and subsequently used by them to make a lending decision.

CIBIL report Errors

On paper, this idea looks great because the system ensures that there is extensive record keeping for all individuals and the data can help lenders and banks make effective lending decisions. So far, the intention was good and admittedly with our huge population and fragile systems, there were bound to be a few hiccups along the way.

But it would seem that the amount of confusion created by the Credit Bureaus has reached unreasonable proportions.

Wrong Credit reports and how they are messing up financial lives of many

From the last 3-4 years, I have been hearing horror stories about how various financial lives have been destroyed as a result of wrong credit reports and mismatches in data. Banks are now mostly reliant on CIBIL reports for processing loan requests – they look at the CIBIL report and take the decision. But how does one guarantee that each and every bit of data recorded in the credit report is a 100% CORRECT?

There have been tons of instances where the report was wrong or had incorrect information and ultimately the consumer had to suffer a lot because of it.

  • Imagine a student who is looking for education loan and his father has applied for education loan, but bank is not ready to give loan because there is no Credit history ?
  • Imagine a family has made the down payment for their dream home and have applied for home loan , but it gets rejected because their CIBIL report has an entry for a credit card due which they have closed 8 yrs back and now neither they are getting loan , nor the builder is co-operating with them
  • Imagine a guy who is in need of personal loan, and if fully eligible for it, but could not get it just because his report has data of some one else whose name is close enough and the system has made the error ?
  • Imagine a guy following up with banks to update his data with CIBIL, then going back to CIBIL to know the status, asking 100 times about it, still not getting any clue on what is the status and finally he feels helpless and sorry for the whole system

Wrong Data in Reports

One of the biggest issues with present credit reports is the inaccuracy of data. Mostly this happens because the report is pulling data from multiple sources that might have incorrect data themselves or because of name mismatches. Even though this is a system fault but the end result is that the investor suffers.

I want to share Prabhat’s story on how his life was impacted due to wrong data in his CIBIL report.

Hi Manish,

Am a real victim of this “CIBIL”. Two years back i requested for a report. The report was full or errors- be it my name, identity, address, accounts etc. I raised a dispute form then. Since then, in that report, my name has changed thrice, my addresses have changed, my contact nos have changed. They apologised and said that corrections have been made. Recently i applied for a loan and again got rejected. When inquired and got the CIR, my data was merging with some other “Prabhat”. To confirm my doubts, i even called that person and highlighted all this in my next mail to cibil. But to no avail. You would always get a prototype reply- “We cant change data on your own and pls contact credit institution for modification”.

Ridiculous, is’nt it? First of all you sweat to get your issues registered (if only you get a great guy who happens to read your mail/ talk to you over phone by luck). Then follow the same to make them understand what is apparent to even a layman. in my case the other “Prabhat’s” pan no is different, dob is different, address and other things are also different but even then the data got merged and when i raised this, they are passing the buck onto credit institutions.

This is clearly not any fault of credit ins but of this cibil only. To be more precise- in their system of extracting data which they are not accepting. Sometimes, after negotiating so many mails and conversation with their executives, i really feel that this is being run by a bunch of nerds who would not listen or not understand your concerns. I have not taken a single penny as a loan in my whole life and now not getting loan just because of this cibil.

I want to knock the doors of law, to claim a heavy compensation- can you suggest me how and where can i lodge my complaint. I have all the evidences in black n white.

Prabhat

Here is another case of spelling mismatch

I got my CIBIL report recently. My Name is CHANDRA SEKHAR SHARMA but the name that I have found on the report is CHANDRA SEKHAR S V. It is not a spelling mistake as CHANDRA SEKHAR S V is a different person at all. But all my credit cards are listed against this name and one loan which is taken by MR CHANDRA SEKHAR S V is also showing here. So it is overall one report mixed up with two person’s information. In other word CIBIL is selling one report to 2 person.

I am going to report this dispute to CIBIL. But it is raising lot of question on CIBIL.
This CREDIT score concept hold good and easy to maintain in country like USA. They are having SSN concept where they are uniquely identifying each individual. But in our country we still to have such concept until UIN /adhar effective completely. Till then we have to face such situation .

Gap in Communication from Banks

The other problem is gap in communication with banks . The whole system is not efficient enough for speedy updates. Given huge banking system and widespread network, its bound to have communication gap. Here is one instance where Subhajit was marked as Defaulter by CIBIL , just because SBI didnt update some data from their side on a loan closed years back

I took a loan from SBI in 2004 and closed it in dec 2012. Now at present when i applied for another loan to some other bank, CIBIL marked me as a defaulter as they did not get any updates from SBI on the closure details. I contacted Chief Manager of the SBI branch from where I took the loan and asked her to send out an email to CIBIL (support@cibil.com), mentioning all my details and report that the loan account is closed now. Even after this was done, CIBIL is still saying that they might take 30 days untill the credit institution reverts back with their response. I dont understand whether CIBIL has a huge miscommunication between their call center folks and the email department. what do i do now?? i wanted to escalate this to the highest authority in CIBIL but i dont have any contact information for the same.

Regards,
Subhajit

Here is another case of Vijay

Hi Manish

In my report, the SBI card which I used to have was mentioned as “WRITTEN-OFF” and the Days Past Due section also had a number 120 put for the last several months ending in Sep-2006. This was definitely wrong info since I had checked with SBI in 2006 and they had informed me that there was no due from me at the time of closing the card. So I contacted SBI and they informed me that it was a mistake from their end and that they have corrected it in the latest update to CIBIL.

Then I informed CIBIL about the mail from SBI and asked them to confirm if the erroneous entries have been removed. CIBIL gives me a very vague answer stating the SBI card account is closed as per instruction. But I want to know if the word “WRITTEN OFF” has been removed from my report and if the Days Past Due section have been set to 0. I have sent them at least 3 mails asking for precise info on the above two queries. But they continue to give me very generic and vague answer.
Please let me know if there is any escalation mechanism when CIBIL gives vague responses.

Also in the score section, there is a line which states “*One or More Trades with Suit Filed Status in the Past 24 Months*”. I asked them for an explanation on what the above line meant. But they have not given any explanation. It sounds like some company has filed a suit against me in the last 2 years. I am not aware of any such suit. I am not able to get CIBIL to explain the line or tell me which company has filed the suit. I am at my wits end to get a proper response from CIBIL. Any help is appreciated.

Regards

Vijay

Using CIBIL report as a weapon

Some banks have also started using CIBIL report and its impact as a weapon against investors. They have started talking in the language of – “Do this, else your credit history will … ” (here is the proof).

Here is a what happened with Ravi

I was using a credit card from ICICI bank and I used it for about 6 months, in between I forgot to pay the due amount for one month and in the next month statement I found additional 6000+ Rs to be paid as late fees + interest + taxes that I refused to pay and deposited the amount that I was expected to pay. And after this I traveled abroad for 1.3 years and on my return from there I was called up by bank and asked to deposit 31 000 Rs against that, here again I refused to pay initially and asked them since I have not used this amount why should I pay this much. But later one gentle man from the same bank called me and said that if I will not deposit the same amount it will affect my credit history and I will not be able to get any loan in future. Hence I deposited all the stated outstanding amount at once.

But now when I applied for car loan , my loan request got rejected by the AXIS bank due to that credit card credit-history. I also approached ICICI bank for same and they immediately issued me the NOC with 0 Rs outstanding for me.and also requested them to get my name cleared from CIBIL, for this they told me that your name is already updated in CIBIL for 0 balance. I forwarded the same email to AXIS bank but still they are not ready to issue me the loan saying that I have paid the money lately after 1 year. Hence I am very anxious about it now that without doing any fault from my side I am becoming a victim here.

Your rights incase you are suffering because of Credit Beureu mistakes ?

A lot of investors who are affected by this CIBIL menace and mistakes from the banks side just feel angry, but they let things go and do not force a resolution. But you need to know that no one has any right to play with your financial life and if someone has, then they need to pay for it. If you have been facing an issue because of CIBIL or the bank and it has impacted you financially or mentally, you should always reach out to the consumer court or banking ombudsman. There have been many cases where customers have got some compensation. The only catch is that you need to be committed to pursue the case and have patience.

Here is one instance where a person was awarded compensation because was mistekenly marked as “defaulter” by the bank and suffered due to this

City residents continue to be hassled by the ‘CIBIL defaulter’ tag over minor disputes with banks. Now, a Sector-39 resident received justice from the UT Consumer Disputes Redressal Forum after a private sector bank had labelled him a defaulter and sent his name to Credit Information Bureau India Limited (CIBIL), an all-India data bank which carries credit history of all commercial and consumer borrowers.

The Chandigarh Consumer Disputes Redressal Forum has directed the bank to pay Rs 10,000 to the harried complainant, and Rs 5,000 as cost of litigation.

The order was issued by the Forum following a complaint filed by Bhajan Palm who told the forum that in 2003, he took a personal loan of Rs 66,000 from the bank, and repaid it in equal monthly installments.

Here is another instance where HSBC was fined for adding the name of a person to defaulter list without strong reason

Hongkong and Shanghai Banking Corporation (HSBC) has been ordered by a consumer forum here to pay Rs 20,000 as compensation to one of its credit card holders for adding his name in CIBIL’s defaulters list even though he had paid all his dues.

While awarding the amount to the HSBC credit card holder, the New Delhi District Consumer Disputes Redressal Forum said the Bank should have “gracefully” accepted its fault instead of adopting an “obstructionist attitude” by seeking rejection of his complaint.

You can read some more cases here or here . 

Below is a 2 part video series from MoneyLife Foundation on “How to file effective complaints and win your battles in Consumer Courts”

Can you share any experience of yours on CIBIL mistakes or any struggle you faced ?

Also let me remind you of the ‘Oh my God’ offer coming on 7th Jan 2014, which you will not like to miss at any cost. Its one of its kind of offer coming soon !

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57 replies on this article “How Wrong CIBIL report’s have harassed & destroyed many investors life ?”

  1. SANDEEP says:

    Hi Sir/Madam,
    My name sandeep singh.
    Recently i have applied for a personal loan and got rejected by the Axis bank due to low CIBIL Score.
    so i have applied to know about my CIBIL score and when got, its shocking for me, first i think there must be some error and this report not belongs to me.
    CIBIL report showing my name mr. GILL SANDEEP S CAPT SANDEEP SINGH GILL
    but when properly checked report.
    Found cibil merged my detail with other person name CAPT SANDEEP SINGH GILL
    CAPT SANDEEP SINGH GILL having big loans on this account.
    The passport, voter id, email, contact and employment detail not belongs to me.

    BUT
    Address, PAN CARD, and credit card in this report is mine.
    CIBIL USING MY PAN FOR OTHER PERSON.
    Recently applied axis bank loan even there.

    i have complaint to CIBIL regarding this issue but they unable to change the record.
    PLEASE HELP ME I REALLY NEEDFUL FOR LOAN BUT SOMEONE ENJOYING ON MY PAN CARD DETAIL AND HAVING LOT’S OF LOANS.

    SANDEEP SINGH
    SANDEEP2SAYS@GMAIL.COM
    7060588499

    1. Jagoinvestor Admin says:

      Hi SANDEEP

      Have you contacted Banking Ombudsman?

      1. Sandeep says:

        Thanks for reply sir,

        Not yet,
        if banking ombudsman …can help me on this I can complaint….
        Pls suggest…

        1. Jagoinvestor Admin says:

          Hi Sandeep

          Your issue in my opinion requires an expert advise . And therefore , you must file a complaint with banking ombudsman .And in case that does not also help you must take help of legal experts.

  2. Nabros says:

    Why does Cibil charge Rs.500.00 from citizens for providing them their own report,!!
    Aren’t these reports required / useful to banks? In fact Banks should be charged for inquiring for each report and not the citizens. And cibil should ask for citizens permission to let these banks check our reports.
    It seems that these blood sucking parasites aka “Bankers and financial gurus” are taking us for a ride.

    1. because its their business and they have decided to charge . Thats why ? Its their business model .

  3. Dear Krishna,

    Your cibil score never remains the same as it has multiple factors linked to it. Your credit utilization is one of the parameter which has a weightage of 30% and there are other parameters such as payment history, length of your credit history and credit mix.

    So when you said moderate usage I assume that you have utilized more than 50% of the credit limit which is not advisable. Keep your usage limited to 30 to 40% of the given credit limit. This will also help you to make the payments fully and will not show a credit hungry picture of yours.

  4. Krishna says:

    Not only their data is incorrect even their evaluation system stinks. Previously my score was above 8.5 when I was using credit cards lightly. Recently, I started using credits moderately in order to utilize the points offered by the credit card companies. My repayments have also been very prompt. Therefore, I expected my credit score to go beyond 9.0. I was shocked to learn that the score came down to around 7.5. The reason given was I was spending more through cards. I immediately stopped making purchases through cards.
    Credit card companies, please watch out. Your earnings are certainly going to get hit if the attitude of CIBIL does not change.

    1. Were you maxing out your credit limit ?

  5. Sam says:

    HI
    I wanted to ask that as of today, does defaulting on payments of mobile companies affect our credit score?And what happens in case the recovery is outsourced to collection agencies?

    1. Credexpert says:

      Dear Sam,

      Currently, CICRA 2005, the act that governs and regulates Indian credit bureaus does not allow telecom companies to report data to credit bureaus. Hence if you are defaulting on your mobile bills, the same would not reflect on your report.

      However, this concept is famous in the West and as the Indian credit bureau industry evolves, the same can start in India as well.

      Kindly clarify your concern regarding “what happens if the recovery is outsourced to collection agencies”

      Regards,
      Credexpert
      http://www.credexpert.in

  6. Ashwin says:

    I recently applied for a loan from a leading public sector bank, and they informed that that my CIBIL credit score report mentioned that an old automobile loan (that expired in 2010) was outstanding and not closed. However, they were kind enough when I told them I have the proof, both from RTO as well as the other bank that gave me loan was closed. I was asked to show the original letter from bank saying that loan is closed, which I did. Casually, I asked them for my CIBIL report, and while it did not show the points, I was a given a HIGH SCORE on the sheet.
    I believe this helped me, and also because I have never defaulted on any credit card or loan payment. However, I’m grateful to the loan section in the bank for not going entirely by the CIBIL report and instead asking me for proof. The banks might have had experiences in the past of errors from CIBIL which made the applicant suffer. Whatever it is, I was unhappy with the bank where I took automobile loan from for not having informed CIBIL, or even if they did, the mistake on CIBIL for not updating the records.

    1. Credexpert says:

      Dear Ashwin,

      Whilst you have had a good experience with the PSU bank which did not rely completely on your CIBIL credit report and instead bothered to validate the facts, you should be rectifying/updating your credit report.

      We would suggest that you write to the bank requesting them to update this loan as a closed loan on your credit report.

      Regards,
      Credexpert
      http://www.credexpert.in

    2. Thanks for sharing your incident which shows the even lenders are aware about issues .. Complain to your bank for not updating with CIBIL

  7. Prashanth says:

    Hi Manish Chauhan,

    This is Prashanth from chennai. i wanted an help for my own cousin. He was stuck up and he has no idea how to reveal out from this issue.
    in the year 2008 he and his friend has jointly opened an account and that guy has used my relative for money and he has even used my relatives pan card number and took about 3 to 4 credit cards and he even got some loan with the help of it.. my cousin is not aware of it any he believed him a lot stating they are best friends.. My cousin has no idea about CIBIl or anything and that bugger has used his contacts and pan number earned a lot and ran away… Even this was not known to my relative now in 2013 we have planned to build a house and we requested for a loan from the bank side we were trying it for more than a month and now finally we were shocked stating that the bank gave us a info that we have less score and we applied for CIBIl data and there were about more than 3 cards and personal loan everything is written off too… so now we are stuck and we don’t have an idea whom and what to do.. that bugger has escaped and now my relative is suffering with this dept and problem.. please give me a solution pls.

    1. Actually there is no solution to this . This is a case of identity fraud and if your friend’s PAN card etc was used, it will be assumed that the loan was taken by him only, especially if it happened in legal way (joint account) . So there is no other solution in short term other than repaying those debts and then that will reflect back in your SCORE in some years .. Sadly , this is truth and yes, this will really affect your cousin in short term .

      Manish

  8. Bhavin says:

    Hi Manish,
    One Information: If you have a loan from Bajaj Finserv, you can check your CIBIL score against your account. I dont know whethere its of at the time of applying the loan or the latest. At the time of applying the consumer durable loan i dint give them my PAN. Ofcourse first down payment was done from my Credit Card and its linked with PAN.

    1. Credexpert says:

      Dear Bhavin,

      One should be ideally checking her credit report and score before applying for any new credit facilities. If you already have a loan/credit card that is open for more than 6 months then, a score would be generated for you.

      Lending institutions report all borrowers data to the credit bureau on a periodical basis. It is basis this data that the credit report & score is generated and not the linking of PAN and credit card.

      Also, it is not a good practice to repay loans using credit cards since the interest rates charged on the credit card would be much higher than the one charged on your consumer loan.

      Regards,
      Credexpert
      http://www.credexpert.in

    2. Yes, you should check your CIBIL and see the status !

      1. Bhavin says:

        I checked my CIBIL around two yrs back and score was 810. Now in Bajaj fin serv site its showing 829!!

        1. Ok , I think you are in good shape in that case !

  9. Credexpert says:

    Dear Poojan,

    An individual’s CIBIL credit score could be:
    -1 (or NH) – When an individual does not have a credit track record at all.
    0 (or NA) – When an individual has credit history of less than 6 months.
    300 – 900 – When an individual has credit history of more than 6 months.

    Does your credit report reflect any details of the education loan, irrespective of the score?

    Since your education loan has been availed in the past 6 months, your credit report should have ideally been reflecting these details. Your score of “-1” indicates that you have not availed any credit facility in your life, which is contradicting the fact of your education loan.

    There is a possibility that the bank is not reporting your data to the bureau OR your data is not picked at the bureau’s end due to the matching logic of the bureau. In either case, you should approach the bank first and then the bureau.

    Kindly verify if the demographic details on your report are accurate and belong to you only. This would help in minimizing any erroneous information on your report.

    Regards,
    Credexpert
    http://www.credexpert.in

  10. poojan shah says:

    My cibil score is -1. My credit card request has been rejected thrice. I have a running education loan . what should I do to get my cibil score corrected. Please advice.

    1. Is your education loan EMI going on ? Is it captured in the CIBIL report ? Seems like the bank is not updating it with the CIBIL

  11. Credexpert says:

    Hi Manish,

    It is really interesting of how you have highlighted the issues faced by a consumer – “the end user” for no fault of his! Whilst there is no argument to the fact the end user is facing the brunt given the situation today….it is also important to understand the genesis of such situation.

    The credit reporting system in India, unlike the West is still in its infancy. The first credit bureau in India – CIBIL was founded in 2000 and effectively started its operations only in 2004-05. It is still a long journey before people in India are fully aware of credit bureaus as a concept and its impact on their Credit Life Cycle.

    In spite of the fact that the West has a much more developed credit reporting system, data issues are equally common. So it would be only fair to understand how wrong data could land in a credit report.

    First, an individual himself, at the time of making a loan or credit card application has provided wrong/incomplete information to the bank. In such cases, it is through this medium that wrong data enters the database of the credit bureau and attaches itself against the individual’s name.

    Second, the bank fed in wrong information against an individual’s name into its database. Easy example would be entering a name “PREETI” as “PREETY” into the database! The bank then reports the same information to the bureau which being only a central repository system cannot edit data unless corrected by the bank. This is yet another reason why an individual’s credit report could end up reflecting wrong data.

    Third, due to the credit bureaus de duping/matching logic, the credit history of one individual can merge into the credit report of another. The fall out of this so called de duping error, could be rejection of a loan or credit card application, dispute resolution, coordination with the bank etc.

    Logically, any of the reasons stated above could result in a wrong account being reported on a credit report.

    Hope that it provides some interesting food for thought!

  12. Muthu Krishnan V says:

    use credit card upto 30% of the credit limit, never use maximum credit even though you pay on time. If you have used maximum credit, try and see if the credit limit on the card can be increased. It is always better to have lesser number of bank products for ease of maintenance. If you do not need some of the credit cards or if you are paying fees on them, close it pronto. Try not to have more than two cards. also be aware that credit score goes down a little when you close an account and will climb up again.

    1. Thanks for that tip !

  13. Sampath says:

    After reading this article, today i got my CIBIL score & i’m quite relieved to see the score as 828/900. I’m very surprised to see so much of information regarding credit cards,loans, Credit Inquiry from 2006. Never expected that so much data is with CIBIL & it has become very powerful entity in the market.
    There are few mistakes here and there in my report which i’ll talk to banks & get clarified.

    I think we all should periodically check the CIBIL Score & make sure everything is okay with it. Otherwise low CIBIL scores can be a very serious problem for us.

    Does reducing the number of credit cards help?
    1) More credit cards with balanced High credit usage (Distributing the usage)
    2) Less Cards with High Credit Usage.
    Which option is better? :-/

    1. Credexpert says:

      Dear Sampath,

      Our advice would be that at any point of time one should hold that number of credit cards which he genuinely needs. Do not increase or decrease the number of credit cards just for the sake of increasing or decreasing your credit utilisation ratio. It could turn out be a daunting task to keep a track on them.

      Regards,
      Credexpert
      http://www.credexpert.in

    2. Hi Sampath

      I am sure this article will answer your queries which you asked – https://www.jagoinvestor.com/2012/01/cibil-credit-report-mistakes-correction-steps.html

  14. Mangesh says:

    Hi Manish

    Thanks for the information!

    If they are giving so much importance to CIBIL report, they must make the process more transparent/easy. The report should be available at nominal charges. It is not affordable to check report every time if banks are making mistakes in updation of credit data.

    However I have some queries regarding the CIBIL score calculations
    Under which circumstances mentioned below CIBIL score gets affected

    1. Dormant account
    2. Loan/credit card enquiry
    3. ECS return for mutual fund SIP/Insurance Policy
    4. Check bounce
    5. Late payment of full credit card bill after paying minimum amount due on time
    6. If I close credit card for and opt for new in another bank, is it required to verify CIBIL report to check whether previous bank have updated the report correctly?

    With Best Regards,
    Mangesh

    1. 1. NO
      2. Yes
      3. No
      4. Yes
      5. Yes
      6. No

      1. Mangesh says:

        Thank you!

  15. Mallikarjuna says:

    This is real waste, the amount of personal loans default is hardly a decimal of the total loan defualt from the corprates. They should come up with such a data and process for corproate borrowers rather than putting the individual or personal loan takers to hardship.

    1. Thanks for sharing your views on this topic 🙂

  16. bharat shah says:

    thank you for bringing the other side of CIBIL report to the future home loan borrowers to prepare in advance.

  17. Tejas says:

    CIBIL= C ONTINOUS I RRESPONSIBILTY OF B ANKS I N OUR L IFES

  18. Abhijit says:

    Hi,

    I tried to apply for my CIBIL report a while ago. I was paying by credit card. After the page, where it asks to put the VISA authentication Password, after I submittet, a ‘Cannot find server’ error came up.

    Wat does it mean? Not sure of my request went through or not. Is there any way to check it?

    1. All you can do is find out in your credit card statement if the payment went through or not .

  19. Amit Jain says:

    @Manish, please share your thoughts if this can be done

    We need support of influencers like you

    1. Hi Amit

      Actually consumer court can be approached , but only by someone who is “consumer” who has been affected. So all those who are affected by CIBIL have to come together, We can surely help you on the next steps !

      Manish

  20. Sony says:

    Dear Manish,

    Congrats for showing the real problems related with CIBIL reports.
    I think, credit cards misuse a lot of people by exorbitant interest and penal charges.
    Prohibition of Exorbitant interest act in different state are against the charges more than 2 % of Bank rate.
    So,35 to 45 % interest of Credit card is illegal.RBI is also silent on the credit cards.
    Really,Money lender act is also applicable for credit cards.because,these are organised money lenders.
    I appreciate you for sharing complaint mechanism through consumer courts.
    National consumer court ordered in 2009 that more than 30 % interest is illegal.
    But,today also a lot of people are included in CIBIL in the name of Credit cards.

    1. Hi Sony

      Can you share more details on Credit card interest being illegal , can you give me some links on this ?

      1. Sony says:

        Dear Manish,

        please refer the findings of National Consumer Disputes Redressal Commission:

        http://ncdrc.nic.in/CC512007.html

        It is against the Exorbitant interest of Credit cards.

        Sony

        1. Thanks for sharing that. Will look at it !

        2. Arghya says:

          @Sony: I have a different take on this interest rate. If a person pays off the credit card bills within the stipulated time, there is no way any interest rate will be charged! However, due to lack of control on expenses, if a person fails to pay on time, then the interest rate kicks in! It is a penalty a person has to pay for being irresponsible. Everybody knows that one should take a health insurance, one should create an emergency fund, one should live within means or try to raise his/her income, but still people fail to do any of these things – why? Because the iPhone 5S or the Yamaha R15 is more valuable than having a health insurance, which cannot be flaunted to peers or cannot be used to impress the new love interest. Banking companies are just playing the greed of a person and benefiting from it. There is a simple solution – do not be greedy! Know the difference between needs and wants and spend accordingly. One can easily buy the iPhone 5S by starting a RD and putting 5K every month, ok, not the 5S, but may be the 6S, when it comes in the market! In fact, use the credit card to buy the phone on the first day of billing cycle, put the 60K in a 45 days FD and rack up reward points and FD interest at over 5%. It is a win win strategy! Instant gratification only leads to pain in later stage, and such greedy people should actually suffer.!

  21. vinod says:

    Hi,
    Dear Manish,

    So many Thanks for such a wonderful blog.

    Pls. Let me know which are the factors are using to know for EMI paying capacity?

    1. Hi Vinod

      I assume that you are asking how to find out your EMI paying capacity? So first you need to understand is that its your montly surplus which is your capacity, you need to look at it from the other angle and find out what is your capacity for house buying ? Can you afford 50 lacs or 1 crore house ?

  22. Amit Jain says:

    I think we should collectively reach out to RBI to make it mandatory to atleast provide one free credit history report from all institutions like cibil. I had a wrong card under my report, asked icici to remove it which they sais has been done. But i have to spend another rs 200 to verify this, This is insane,

    1. Sushil Girdher says:

      @Amit Jain….I agree with You….RBI should come up with Mandatory Instructions…..Cibil must provide Free credit history report to cosumers atleast once

      @Manish….Please Remove this Word Captcha system for comments….Or try to change it with simple images that can be read easily

      1. Removed the Captcha !

  23. Sarath says:

    I recently bought my CIBIL report, and I was confused whether it was mine or not. They had atleast 3 email ids and mobile numbers added as my contact, none of them being mine, and a some loan details that I was not even aware of. The rest of the details were correct.

    Contacted CIBIL, and got the standard email regarding dipute etc. So put in that, and then got the reply that Union Bank & HDFC have reported these numbers and email id’s against my PAN. Similarly for the loan.

    I was able to remove the loan from the credit report by HDFC, but still no one knows (both in HDFC and Union Bank) on how to remove these wrong details.
    Happy to take any advice.

    1. Hi Sarath

      If this has affected you badly, you should reach out to consumer court on this and complain to them against CIBIL and ask for some compensation

  24. Ashwin says:

    This is something we borrowed from the west. Although the was intention to protect the bank from losses by offering loans to people who cannot “repay” it back, the execution is pathetic and has turned to “harass” the public kind of initiative. In West, esp US where the consumer protecting laws are very good, here, In India it is almost non-existant. Infact, forget about protecting, there is acute lack of information. I have many friends who do not even know that something like CIBIL and credit history exists. My dad (or people of similar ages) did not know about it until i got a loan from a bank and the Bank Manager told him about Credit history! My Father was wondering, what exactly is it! If this is the situation, then imagine if such people are caught in the web of “No Credit history” or “Bad credit history”. They will be in a bad situation, no loans and no idea why their loan applications are getting rejected and what they should do! The other issue is incorrect entries, it takes lot of running around with the Bank or the financial institution to get it corrected. Also the fact it might take a few months to get the changes to reflect in the report affects the loan seeker badly. As long as they don’t make the grievance redressal simpler, this is just pain in the —.
    The govt or the RBI or whoever is responsible should have this basic education made available to the public so that they are atleast aware of this. Ex: A person applying for a Credit Card or applying for a personal loan/Home loan etc should have a mandatory education by the bank about the effects of credit history.

    1. Thanks for sharing your views and wisdom on this topic Ashwin !

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