CIBIL report and Bank Loans

With the current economic crises and cash crunch, banks are very careful about lending money. They closely watch the credit history of the person or organisation which has applied for loan and CIBIL (Credit Information Bureau of Indian Ltd) is quite helpful to get the credit history of the person and organisation. A littel default can also be reported by the bank and can spoil the rating of the person. With the increasing defaults in payments, this facility is really useful for the banks and financial institutions for lending money.

But there is another side of the story. This is my personal experience and extremely bitter.

Tanay is very prompt in his all payments - be it loan instalment or the credit card payment. I have never seen him late by even a day. Sometimes when there is a wrong charge mentioned in the statement and I ask him to ignore the statement by saying - When you know it is incorrect just forget and don't make payment, but he talks to the bank to make all the correction at their end too.

Few months back We applied for the housing loan transfer but they simply rejected our application without mentioning proper reason of that. We too ignored as it was not very important for us. Later, Tanay applied for Citi bank card and that too got rejected, this time Tanay was upset but I told him to forget about it as he is already having many credit cards. Finally one day, An executive from American Express approached and this time again Tanay filled the application for platinum card but to our utter surprise, his application was again rejected. We both worked with American Express few years back and therefore they have attached the CIBIL report alongwith the rejection letter where we found about our credit history.

It was not only shocking but frustrating to see that no more information was provided except a default of Rs. 2000 with some bank without mentioning bank name or credit card no. by which we could have got more information. I started surfing about CIBIL and wrote a mail to them. They sent us the bank name and credit card no. After many reminders we found from the bank that was annual fee of the credit card which we have already surrendered to the bank 5 year back and sent the card in two pieces back to the bank. I remember this distinctly because I came to know about Jay Nagar post office for this context only. But I never got a clearance letter from the bank and I never bothered about it as it was not important for us.

After CIBIL report we contacted the bank and wrote approx 20 reminder mails and many calls and visits to the bank, they still charged us Rs. 1300 for the settlement and wrote back an apology letter for the wrong reporting to CIBIL.

There is another charge with other bank and after investigation we found it is about another credit card which we had surrendered in 2002 in Delhi. We never got any reminder letter from the bank about annual charges as we stayed in the same house for another 2 years. There is another annual fee of Rs. 1000 shown pending, which is now Rs. 14000 with late fee charges. Who should be blamed for these charges. At least CIBIL should not believe blindly on bank's report and should see that the charge are not the annual fee on which no purchases are made since then. We are still writing mails to this bank and only god knows when this will be cleared and how much more effort will go behind this. Our CIBIL report has shown credit limit as 93 lacs and just with few thousands, it has shown negative credit rating.

These services are good for lending money but with every right there is lot of responsibility attached and in this case, banks should be extremely careful before reporting any rating to CIBIL and likewise CIBIL should also check the transactions of the default payments.