Monday, Nov 28, 2022

Explained: Importance of credit score in getting a loan and how can one fix it

What is credit score, when is it downgrade, and how can a customer rectify it?

Fraudsters have recently used people’s permanent account numbers and other identity documents to avail loans. (Representational Photo)

Recently, there have been multiple cases where fraudsters have used people’s permanent account numbers and other identity documents to avail loans from fintech firms and non-banking financial companies (NBFC). As these loans remain unpaid, it affects a customer’s credit score despite them not availing these loans on defaulting on repayments.

What a downgrade in credit score does is that it leads to a denial in future credits, or imposition of interest rates that are much higher than the market rates. So, what can a customer do in such a situation? We explain the options that are available to rectify the credit score.

How does one get their credit score fixed?

A customer can check his/her credit score, and whether any loan (which has not been taken) is outstanding through the reports furnished by the respective credit information bureaus. These reports can be obtained by logging into CIBIL, Equifax or Experian, or through net banking.

Experts say that the easiest way to fix the credit score would be through an institutional process initiated by the Reserve Bank of India (RBI). The affected persons can also directly approach the information provider and the bureaus, even though it is usually a tedious process.

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“This rectification process has to be case specific… if a CIBIL score has been distorted, the customer has to reach out to the specific institution where their security was compromised. The loan provider, who is also the information provider, will have to reach out to CIBIL to put the customer’s rating in order. In addition, the aggrieved parties will also have to reach out to CIBIL and initiate a dispute request, either online or by writing to them,” Surya Bhatia, a certified financial planner, said.

An easier way that financial experts suggest is by asking the RBI to intervene and provide relief to aggrieved customers as there are many people who have been affected recently.

“The simplest and most transparent way is for the lending institutions to get these corrected with credit information bureaus. As thousands of customers have been hit by such scams, the RBI can direct the specific institutions to set up a process to solve this,” Srinath Sridharan, a corporate advisor and independent markets commentator, said.


“If individuals have to do it, it will be a painful process and they need to provide a lot of documentation. The Ombudsman can be approached as well if one doesn’t receive a satisfactory answer from the lender. The onus of proving this should be on the institution and not the individual,” he added. If the issue is still not resolved, customers will need to approach the RBI through its Ombudsman scheme.

Where does one go if the issue remains unresolved?

The Reserve Bank of India launched the Integrated Ombudsman Scheme that provides solutions to customers’ complaints, like deficiency in services by banks, NBFCs, and payment system operators.

The scheme enables nearly 44 crore loan accounts and 220 crore deposit accounts to file any grievance with the RBI via an online portal. It enables a one-point interface for customers to file complaints, submit documents and track the status of their problems.


A centralised receipt and processing centre has been set up at RBI Chandigarh for receipt and initial processing of physical and email complaints in any language. The scheme has integrated the three existing Ombudsman schemes of RBI — the Banking Ombudsman Scheme, 2006, the Ombudsman Scheme for Non-Banking Financial Companies, 2018, and the Ombudsman Scheme for Digital Transactions, 2019.

How does one file a complaint with the Ombudsman?

Since loan providers are mostly banks, NBFCs or payment services providers, most of the complaints will be covered by this scheme. Here’s how one can reach out to the Ombudsman:

  • Complaints can be filed online on
  • Complaints can also be filed through the dedicated email at or sent in physical mode to the ‘Centralised Receipt and Processing Centre’ (CRPC) set up at Reserve Bank of India, 4th Floor, Sector 17, Chandigarh – 160017.
  • A contact centre with a toll-free number (14448) manned by RBI staffers operates to provide assistance to customers in lodging complaints and providing information. This centre operates from 9:30 am to 5:15 pm and is available in Hindi, English, and eight regional languages.

The email and physical complaints received at CRPC are registered on the CMS (Complaint Management System) by the staff after getting additional information, if any, from the customer.

Has India seen a rise in such complaints?

The RBI witnessed a 22.27 per cent rise in the volume of complaints under various ombudsman schemes between April 2020 and March 2021. Complaints related to ATM and debit cards, mobile banking and credit cards account for the bulk — 42.74 per cent of the total complaints as compared to 44.65 per cent in the previous year. There were 60,203 complaints about ATM and debit cards, and 40,721 about credit cards.

The volume of complaints stood at 4,04,143 during the period on an annualised basis. Chandigarh, Kanpur and Delhi got the maximum number of complaints, according to RBI’s latest data.


The number of complaints received against NBFCs and digital transactions stood at 8.89 per cent and 0.98 per cent, respectively. The overall disposal rate has improved to 96.59 per cent from 92.52 per cent in 2021, despite a higher volume. This could be achieved due to end-to-end digitisation of the complaint processing workflow in the CMS.

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First published on: 26-02-2022 at 11:06:54 am
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