Lok Sabha Question No. 4854 (UNSTARRED), answered on 2026-03-23
Subject: Transparency in Calculation of CIBIL Score
Ministry: FINANCE
Asked by: Shri Shafi Parambil

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO- 4854

ANSWERED ON MONDAY, 23 MARCH, 2026/CHAITRA 02, 1948 (SAKA)

## Transparency in Calculation of CIBIL Score

## 4854. SHRI SHAFI PARAMBIL:

Will the Minister of FINANCE be pleased to state:-

- (a) whether the Government is aware of complaints regarding lack of transparency, uniformity and  logical  consistency  in  the  calculation  of  Credit  Information  Bureau  India  Limited (CIBIL)/credit scores by credit information companies, if so, the details thereof;
- (b)  whether  minor  delays,  technical  errors  or  disputed  entries  are  reportedly  resulting  in disproportionately  low  credit  scores  affecting  individuals'  access  to  loans,  if  so,  the  details thereof;
- (c)  the  regulatory  framework  governing  the  methodology  adopted  by  credit  information companies for computing credit scores and whether the Reserve Bank of India reviews such methodologies, if so, the details thereof;
- (d)  whether  the  Government  proposes  to  introduce  greater  transparency,  accountability  and grievance redressal mechanisms in the credit scoring system, if so, the details thereof; and
- (e) the steps taken by the Government to protect consumers from arbitrary or rigid credit score calculations that adversely impact their financial credibility?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) to (e): Credit Information Companies (CICs) function under the extant framework of Credit Information  Companies  (Regulation)  Act,  2005  (CICRA),  Credit  Information  Companies Rules, 2006 (CIC Rules) and Credit Information Companies  Regulations, 2006 (CIC Regulations).

The Reserve Bank of India (RBI) has informed that the credit scoring models used by the CICs are  proprietary  in  nature  which  are  based  on  their  respective  experience  in  the  business  of credit  information.  CICs  generate  credit  score  of  a  borrower  considering  multiple  factors, including  but  not  limited  to,  recency  and  frequency  of  delinquency,  debt  level  and  payment history. CICs generate Credit Information Report (CIR) of a borrower. RBI has not prescribed any methodology to be adopted by CICs for calculating credit scores.

The credit score is  derived  based  on  the  credit  information  submitted  by  Credit  Institutions (CIs) [as defined under section 2(f) of CICRA, 2005] to a CIC of which it is a member. Further, in  terms  of  Section  21(3)  of  CICRA,  2005,  in  case  of  any  discrepancy  found  in  the  CIR,  a borrower  may  request  the  concerned  CIC  or  the  CI  for  correction/updation  of  his  credit information and the concerned entity (CIC/CI), as the case may be, shall take appropriate steps to update the credit information within 30 days of being requested to do so. However, CICs being  repositories  of  credit  information,  any  correction,  deletion  or  addition  in  the  credit information can be made by the CIC only after the same has been certified as correct by the concerned CI.

Further, a borrower  may  also  lodge  a complaint  under the  Reserve Bank  Integrated Ombudsman Scheme, 2021 (RB-IOS, 2021) against a CIC/CI to the extent not excluded under the  said  Scheme,  through  the  following  link:  https://cms.rbi.org.in,  for  redressal  of  the grievance as per the provisions of RB-IOS, 2021.

In  order  to  strengthen  and  improve  the  efficacy  of  the  grievance  redressal  mechanism  and customer service provided by the CIs and CICs, RBI has stipulated that the following measures be put in place by CIs and CICs.

- (i) All CIs are required to be members of all CICs and submit data to all of them.
- (ii) Standardised data formats have been prescribed for reporting of credit information to CICs by CIs under each of the three reporting segments -consumer, commercial and microfinance.
- (iii) CIs and CICs have been directed to keep the credit information maintained/collected by them updated at fortnightly basis or at shorter interval as mutually agreed between the CI and CIC. CIs to ensure that the records submitted to CICs are updated regularly and that no instances of repayment, including that of the last instalment, are left unreported. Further, upon review by RBI, the extant directions have been amended, vide Amendment Directions issued on 04.12.2025. The amended directions which come into force  from  01.07.2026,  require  the  CIs  to  submit  credit  information  with  greater frequency  (i.e.  as  on  9 th ,  16 th ,  23 rd   and  last  day  of  the  month)  to  CICs  or  at  shorter intervals as mutually agreed upon between the CI and CIC.
- (iv) CICs to send alerts through SMS/email to customers when their CIR is accessed by the Specified  Users,  wherever  mobile  number/email  ID  details  of  the  customers  are available.  CIs  to  send  alerts  through  SMS/email  to  customers  while  submitting information to CICs regarding default / days past due (DPD) in existing credit facilities, wherever the mobile number/email ID details are available.
- (v) CIs  to  have  a  dedicated  nodal  point  /  official  of  contact  for  CICs  for  redressal  of customer grievances.
- (vi) CIs to inform customers the reasons for rejection of their request for data correction, if any, to enable such customers to better understand the issues in the CIR.
- (vii) CIs to undertake Root Cause Analysis (RCA) of the customer grievances at least on a half yearly basis.
- (viii) With a view to enable proactive detection of errors in credit reports and credit scores, if any,  RBI  has  also  mandated  the  CICs  to  provide  access,  upon  request  and  after  due authentication of the requester, to one free full credit report including credit score, once every year.
- (ix) In  addition  to  above,  RBI  has  prescribed  a  compensation  framework  for  delayed updation / rectification of credit information by CIs/CICs wherein complainants would be entitled to a compensation of ₹ 100 per day for delayed resolution beyond 30 days of filing the complaint.

The objective of the aforesaid measures is to address any issues concerning credit information being reported to CICs by CIs, which forms the basis for calculation of credit score.

With regard to the concern on rejection of loan applications on the grounds of credit score, RBI has informed that it has not issued any guidelines/instructions to its REs such as Banks, NBFCs, etc.  to  reject  a  loan  basis  a  certain  credit  score  and  neither  prescribed  a  minimum credit score for securing a loan. With an intention to ensure that the credit decisions of CIs are based on credit information available in the system, RBI has mandated that CIs to include in their loan policies / credit appraisal processes, suitable provisions for obtaining CIRs from one or more CICs. However, credit related matters of lenders are largely deregulated, and lenders are expected to take credit decisions based on their commercial judgement and risk appetite, as per their Board-approved policy and broad regulatory guidelines.

RBI has also informed that lenders rely on various factors to arrive at a credit decision and the information sourced from CICs forms only one of such various other factors.  In this context, information  on  past  repayment  history,  including  information  on  delayed  repayments,  loans settled, restructured, written-off, etc., in the CIRs, is essential for assessing the creditworthiness of a borrower and to enable lenders to make informed credit decisions. However, as part of Best  Practices  for  CIs,  they  have  been  advised  that first  time  borrowers'  loan  applications should not be rejected just because they have no credit history.

Further, RBI has mandated that CIR shall provide appropriate disclosures, if any information contained therein has been disputed and the matter has not been satisfactorily resolved. If the customer so desires, his/her comment could also be added to the CIR.

All  CICs  have  uploaded  knowledge  material  on  improving  credit  score  on  their  website  for public  dissemination.  Further,  RBI  has  mandated  that  to  facilitate  the  understanding  and interpretation  of  credit  scores  in  an  easy  and  consistent  manner,  the  credit  scores  to  be calibrated  from  300  to  900  by  all  CICs,  so  that  they  have  a  common  classification  of  credit scores.

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