Economic Times

Your Credit Score Could Let You Down — Even If You’re Responsible

A three‑digit number—ranging from 300 to 900 is increasingly dictating critical aspects of everyday life in India. It can shape your ability to get a home loan, open a credit card, land a job, or even access healthcare. But here's the catch: that score can be inaccurate, opaque, and almost impossible to contest.

1. Beyond Financial Risk: Pan‑Indian Gatekeeper

What began as a tool for lenders has transformed into a universal filter:

• Banks use it to underwrite loans and cards.
• Employers are increasingly checking scores during recruitment.
• Landlords may now factor it into rental decisions.
• It may soon extend to healthcare providers in some countries, dentists reportedly refuse care based on credit history.

2. A System Prone to Errors

Consumers are reporting glitches such as:

• Phantom loans you never took,
• Sudden unexplained score drops,
• Dispute processes that drag on for months.

Although courts like one in Bengaluru have awarded damages for delays in clearing errors, resolution remains rare and slow.

3. Built on Incomplete Data

Credit bureaus (TransUnion CIBIL, Experian, Equifax, CRIF High Mark) rely on data from lenders. But:

• Updates are slow,
• Reporting is inconsistent,
• There’s minimal transparency in how scores are computed.

The Reserve Bank of India is working to improve the system, yet the current setup continues to let people down.

4. The Real Culprit: Systemic Flaws

• Ahead of the public listing, pre‑IPO NSDL shares have slipped about 20% from a 52‑week high - falling from ₹1,275 to near ₹1,025 in the unlisted market
• This drop reflects broader sentiment, influenced by discounted listings like HDB Financial’s recent debut

5. What Lies Ahead

• RBI reforms (like faster reporting windows) offer protection, but implementation is slow.
• Regulatory pressure is slowly pushing for better dispute resolution and transparency.
• Consumer awareness and frequent credit checks (e.g., via CIBIL portal or apps) can help catch errors early.

Bottom Line

Your CIBIL score shouldn’t define your reliability—but when systemic flaws override your responsible behavior, that’s exactly what happens. The numbers are powerful, but so is the system behind them—and right now, many consumers are paying the price for its failures.

Would you like me to include tips on monitoring and improving your credit score, or outline RBI’s top recommended reforms?