What are the Limitations of Credit Reports fetched by Banks?
What are the Limitations of Credit Reports fetched by Banks?
November 30th, 2022
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Banks and Lending Institutions in India fetch the Credit Report about the Loan applicants and the Credit Reports Fetched by the Banks have many limitations such as:
- Credit Reports fetched from TransUnion CIBIL, Experian, Equifax, and CRIF High Mark Servers are different from each other, and Scoring Pattern is also different.
- Reporting Dates are not Current Dates and as such the reflections in the Credit Reports are not the latest updates about CIBIL Status, Closure Dates, and Overdue amounts.
- To maintain the secrecy and privacy of Credit and CIBIL Data, the Credit Reports do not show the i) Name of the Lending Banker ii) Account Number.
- Contact Numbers and Email IDs of Nodal CIBIL Teams of Reporting Credit Institutions are not provided so that the consumers can easily contact the Reporting Credit Institutions for any Misreporting of Facts.
- There is no law in India to sue the Credit Bureaus or Reporting Credit Institutions for damaging the Credit Reports of the Borrowers due to the merger of data of two individuals getting merged due to lack of a unique identifier as Transunion CIBIL and Credit Bureaus use a complex match logic, which is an automated process and involving no manual intervention, to help ensure that the errors do not occur.
- Banks enter into “Settlements” with their Borrowers without taking their “Guarantors” into confidence in the Settlement Procedure and Report such Loan accounts in Credit Reports of Guarantors which is not legally justified. Having released the securities to the Principal Borrower by the Banks, the Guarantors are legally automatically absolved of their liabilities as Guarantors but Banks keep on reporting such “Settled Loan Accounts” in the CIBIL Reports of both the Guarantors whereas such accounts need to be removed from the CIBIL Reports of Guarantors as Banks has lost their legal right against the guarantors by entering into “Settlement Agreement” with the borrower without taking the Guarantor into confidence.
- Wrong Reporting of Date of Birth, PAN ID, Voter ID, Passport ID, DL-ID, Aadhar ID by the Reporting Credit Institutions through an oversight in which case Somebody Else will Damage Your Credit Report.
- The public is under the misconception that Standard Assets cannot Lower the CIBIL Score as No Banker and Lending Institution creates awareness amongst its borrowers and they keep on charging Penal Interest in Loan Accounts as Standard Assets are those accounts which have DPD (Days Past Due) of 1 – 90 days and Zero DPD is the ideal CIBIL Status.
PS: We have no association with any Credit Rating Agency like CIBIL, Experian, Equifax, or CRIF High Mark – which are the only Credit Rating Agencies in India.
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