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You have a bad credit history, so no loan for you

May 14, 2008 15:36 IST
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Did your bank ever say this to you despite repaying all your dues on time?

Recent newspaper reports say that two private sector banks rejected loans of two borrowers exactly on this premise. While the borrowers had been regularly repaying their credit card dues and other loan EMIs the banks got a report from the Credit Information Bureau of India Limited, CIBIL, that they have a bad credit history. Simply put, the CIBIL report suggested that the borrowers were not good when it came to repaying their dues to banks.

CIBIL is a central agency that prepares a report of all loan borrowers who have defaulted on their payment to their banks. In short, CIBIL knows if you are a good borrower or a bad one. Banks seek these reports, called as credit reports, from CIBIL before they sanction you a loan amount.

In the case of these two customers their banksĀ -- Citibank and Standard Chartered -- had allegedly falsely reported them for not paying their dues.

Sometimes even when customers settle their disputes with their lending banks regarding credit cards, loans and other disputes these banks fail to update the same with CIBIL. This is what seems to have happened with these two customers.

Have you ever been wrongly reported to CIBIL? Did your bank ever reject your loan on this premise?

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