I am writing here hoping that the problem on how banks function with respect to CIBIL and how genuine customers face hardships because of this half baked system in India finds voice.
If you google for CIBIL related problems faced by consumers you will understand the depth of problems faced by helpless individual consumers against this half baked system. I will highlight some of them and hope you will be able to give helpless consumers a voice to fight CIBIL and its members.
1. I had recently applied for personal loan and was rejected after week long process of documents collections, many verification phone calls at office, home, reference and physical verifications at office and home. The reason given by current day faceless banking phone executive is that my name appears in CIBIL. Any further questions goes unanswered and some times get imiganary replies. My point is if banks take CIBIL score/reports so seriously for processing loans, why not first ascertain this first before collecting documents and other procedures. This will surly save valuable time and efforts of every one involved.
2. Now with this kind of experience many cosumers are awakened that some thing is happening against their names with out their knowledge. So you google and start doing your research to find you are not alone. Now if we approach CIBIL to know your details, we need to pay a nominal amount (online or draft) but still have to send physical verification papers like PAN and address prooof to mumbai and wait for another 10-15days to know your own details. In developed countries like Singapore, we can get the same online in 5mins. Can't CIBIL and its members create proper systems before launching this, its very clear that neither the banks nor the CIBIL is concerned by consumer inconveniences.
3. The third problem i have come across is the accuracy of information updated by financial institutions to CIBIL. After my personal loan rejection i obtained my CIBIL report after waiting for 20days and found that it consisted of entries which i had never imagined. It showed two credit cards in my name from two different banks which i had never received. When i called these banks customer care call centers, both banks systems could not find my credit card numbers in there cal center systems and was advised to personally visit their debt management managers. From CIBIL i could find out that these cards were issued in 2006 and showed nill balance but was last reported to CIBIL some time in 2009. Now customers have to run behind these banks to get their records updated which will take furtehr 30-45 days by CIBIL. So effectively consumers will have to spend atleast 4-6months to get this updated for no fault of theirs. CIBIL claims that they have dispute resolution mechanism but puts onus on their members to update corrected information. So CIBIL is acting big brother with out any responsiblities.
4. The next draconain rule is that CIBIL will have entries in their system for a period of 7years from the date of last reporting. So in cases like i highlighted above where the account was opened in 2005 and closed some time later but reported to CIBIL couple of years later. The entry keeps showing on my report for next 7years. Such entries will be damaging and can easily last in your reports for 10-15 years on the basis of banks fancy on when ever they last report.
5. Now the bragging that goes on about advantagesof having CIBIL is that it will help consuemers to negociate better interest. Till now i am yet to come across any bank which is fixing interest rates based on your CIBIL score/reprot.
6. Now I had an instance where a bank issued me a credit card with limit of Rs. 10, 000/- out of which Rs. 7800 as balance transfer from my another card. When the sales guy took application from me for this card, he promised me a gold card with limit of Rs. 1lakh. But eventually when i received the card i had a limit of Rs. 2, 800 after duducting for my balance transfer limit. So i insisted on closing the card but the bank refused since they had already taken the balance transfer from another bank. This led to dispute and i eventually closed the account by paying only the banance transfer amount. This account was opened in 2004 and i eventually closed in but till date this entry shows in my account as "Posted with out settlement" meaning the bank has not bothered to update my records. Due to this one entry in my CIBIL i am not able to get any loans or credit cards.
7. My question is what is the option for people who have some negative entries in their CIBIL report for what ever reasons. Cant the banks lend them on higher interest? Barring the above mentioned single entry in my CIBIL report, my credit track record is clean for last five years. But banks still refuse to lend, what should people like me do.
My submission is that firstly this system should be fought in the interest of common man. CIBIL and its members should refine their systems to ensure that habitual defaulters and fraudesters are kept out of the lending system at the same time genuine consumers are not harressed. There should be a grading mechanisim considering the value of disputes, over all credit record, reason for disputed enties etc.
I am willing to share all the documents i have on my case and i am sure there will be many like me who can do the same if there is any forum who are already fighting such a common cause.
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