{"id":1299303,"date":"2025-08-25T06:38:15","date_gmt":"2025-08-25T01:08:15","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1299303"},"modified":"2025-08-25T06:43:32","modified_gmt":"2025-08-25T01:13:32","slug":"cibil-score-not-mandatory-for-loan-approvals-says-finance-ministry","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/cibil-score-not-mandatory-for-loan-approvals-says-finance-ministry\/","title":{"rendered":"CIBIL Score Not Mandatory For Loan Approvals, Says Finance Ministry"},"content":{"rendered":"\n

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In a recent Parliament session, the Finance Ministry clarified that CIBIL scores remain an important, but not mandatory, component of loan assessment<\/strong>. Union Minister of State for Finance, Pankaj Choudhary, explained that TransUnion CIBIL operates as one of four RBI-licensed Credit Information Companies (CICs) \u2014 alongside Equifax, Experian, and CRIF High Mark.<\/p>\n\n\n\n

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These CICs are regulated under the Credit Information Companies (Regulation) Act, 2005<\/strong> and collect borrower repayment data,<\/a> enabling banks and lenders to assess creditworthiness.<\/p>\n\n\n\n

Why Is CIBIL Score Important?<\/h3>\n\n\n\n

Banks use CIC data to evaluate loan applicants\u2019 repayment capacity. Reports include details like loan defaults, settlements, delayed repayments, or restructuring<\/strong>. This makes CIBIL and similar scores a key input in the credit decision-making process. However, the RBI has not mandated a minimum score<\/strong> for loan sanction. Instead, lenders consider a borrower\u2019s entire financial profile and internal policies.<\/p>\n\n\n\n

Can You Get a Loan Without a CIBIL Score?<\/h3>\n\n\n\n

Yes. The RBI has clearly stated that first-time borrowers cannot be denied loans simply for lacking a credit history<\/strong>. For such applicants, banks may use alternative methods like income evaluation and repayment ability instead of credit history. This ensures financial inclusion, especially for young borrowers.<\/p>\n\n\n\n

Fees for Accessing Your Credit Score<\/h3>\n\n\n\n

By RBI regulation, CICs can charge no more than \u20b9100<\/strong> for an individual\u2019s credit score. Moreover, all CICs are required to provide one free full credit report annually<\/strong>, which includes the credit score. This empowers consumers to track and correct errors in their credit history.<\/p>\n\n\n\n

Will CIBIL Be Replaced by a Government Body?<\/h3>\n\n\n\n

Contrary to speculation, the government has no plans to replace CIBIL with its own agency<\/strong>. While the National Financial Information Registry (NFIR)<\/strong> is being developed as a central repository of financial and credit-related data, its purpose is to supplement<\/strong>, not replace, existing CICs.<\/p>\n\n\n\n

Safeguards Against Misuse of Data<\/h3>\n\n\n\n

To protect borrowers, RBI has mandated several safeguards for CICs:<\/p>\n\n\n\n