Saturday, 19 January 2013

CIBIL, a new name for a Cartel formed by banks to harass people

CIBIL, a new name for a Cartel formed by banks to harass people

Have you ever gone to purchase a car or a new house and had to apply for loan for the same, then you would have noticed the loan provider mentioning CIBIL and how your loan cannot be passed as you have a low score with CIBIL.   A name you have never heard before in you life.

I have already written a article about the realities of the Stock market and Insurance.  This has happened to many new home buyers or car buyers.  The dealer will then suggest you to get in touch with CIBIL.  When you contact CIBIL you will come to know that your scores are low due to following reasons
1.  Past payment on Credit Card is not done and the case has not been settled.
2.  You have never availed a loan before so your score is low.
3.  You have not repaid previous loan with some other bank or paid it after some negotiations/after due date.
OF the above I can understand point no. 3 but point No. 1 is the most prevalent and often the prime cause for low CIBIL scores.  In most cases you may have made payment and not received a settlement letter(a duty of the credit card co. to provide the same)  or you may have a credit card earlier which you may not have used and the annual fees have not been paid by you.  Now the Credit Card companies usually treat this as default and go on adding penal interest on the amount, which at the time of buying your new house or car becomes a really big amount.  Another issue is if you have never taken a loan in your life it proves that you dont need/never needed any financial help for outsiders before approaching for your home loan/car loan.  How can should this decrease your score I fail to understand.  In fact I believe the score of such individual should be very high given the fact that he/she has never taken a loan.  But CIBIL looks at it differently. 
Now if you want to buy you new house or car you have to clear this amount.  It seems really silly at that point of time but this how the setup has been put in place to ensnare a person in such a way that without clearing the past dues he wont be able to get his new car or home, however stupid/unrealistic or cheating the old pending amount may seem.
CIBIL is actually a Credit Information Bureau set up by multinational TransUnion International Ltd.  and Indian Banks as associate share holders.  It is actually a one stop shop for banks to know if a person applying for loan is credit worthy or not. 
But over the years CIBIL has developed into a cartel for the same banks.   
I have suffered from the 1st case where I had made payments to SBI Cards in 2007 but they failed to issue me a settlement letter for the said payment.  However when I went to apply for another card from some other bank in 2012, after whole five years in which SBI Cards never bothered to contact me,  the other bank approached CIBIL for my credit rating which was 606 (I obtained the rating later) .  Now the bank refused the new card to me, not that I needed it so much.
However when I studied the CIBIL report, I was surprised that only those payments had been listed where I had made a delay in payment due to some financial problems.  The payments made by me on time to Nationalised Banks were not taken into account.  Even a home loan availed by me from Bank of Maharashtra, a NSE and BSE listed bank, and prepaid by me, was not added to the CIBIL score. 
On raising a dispute with them, they sent me a email that a dispute has been raised in the matter and will be resolved in 30 days.  But as of today I am to hear from them.
In the meantime I received another email from CIBIL saying that I required a Financial consultant to repair/improve my credit scores.  When I visited the website of the said improvement company, It asked me to pay Rs.10000.00 upfront to become its member and then it would issue me a new card, which I should regularly use and make payments, which in turn will improve my credit score.
On reading the above para you will understand, that CIBIL appears to be a blackmailer in white collar, who is inducing me to spend my Rs.10000.00 and get another card, which I don't need, just to improve my scores.
I have also raised dispute with SBI Cards and CIBIL for the earlier point no.1 but have still not received any reply.  I have also approached the Reserve Bank of India's Banking Ombudsman to resolve the matter.
My argument is simple why should a individual go for a unnecessary loan/credit card just to increase his score and fall into another debt trap. 
Many of you may have gone through the above situations, kindly post your suggestions/comments or email me so we together can approach a competent authority to stop the Banks and CIBIL from forming a CARTEL which is not allowed under Indian laws.
Vijay Prabhu


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13 comments

  1. Well-written, liked your post.

    ReplyDelete
  2. It is really helpful blog.I will also inquire for my score.Thanks for posting.

    ReplyDelete
  3. What an irresponsible organization it is & how lethargic their services are, seriously and how lethargic are their services. They have reported someone else's credit card default in my report, due to which I had to go through a lot of pain, loan application denials and very much of a loss by taking loans elsewhere with higher interest rates.

    The details are provided here, with email exchanges between CIBIL and I.

    http://blog.thitherwards.com/cibil/

    Please go through this and share it with all public, however & wherever possible.

    ReplyDelete
  4. Hi vijay


    I am also in same boat and agree to ur views. But what action is to be taken. I am having final settlement receipt from sbi credit cards which they are denying to accept as final settlement and asking for letter head.


    yogesh

    ReplyDelete
  5. Yogesh there is nothing much you can do except put some fear into them. Apply for a dispute with Cibil, raise a dispute with the ombudsman (you will get one in google search) send a email to the dy Gov RBI at bomumbai@rbi.org.in and search for and go to all forums and criticize them as much as possible giving your true accoutn only dont use bad language. SBI cards also has a forum go there and complaint.
    All this will not help you but atleast they will know that we are literate and know what it takes and stop them from duping others
    I have already done all the above so go ahead.
    If you have any questions just post them here. Add my blog to your feed and also twitter.

    ReplyDelete
  6. I had no idea my credit was bad. The guys at Credit Sudhaar analysed my report. The process took some time but my credit was restored, enhanced and protected. I have no reason for complaints.

    ReplyDelete
  7. My application was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review.

    ReplyDelete
  8. My loan was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review

    ReplyDelete
  9. raj mary and hari prasad, so how much is credit sudhaar paying you to post this? i am interested in part time ad posting jobs aswell!

    ReplyDelete
  10. Yes they are not even following the act under which it is incorporated. The act clearly states that the outstandings above 7 years should not be reporting. what CIBIL is doing that they are advising the bank to shift the outstanding to another entity and show them on cibil score. even if you request they are not removing them and they are correct.

    ReplyDelete
    Replies
    1. cibil does not send mails to anybody suggesting another company etc

      Delete
  11. strongly agree with this point "Another issue is if you have never taken a loan in your life it proves that you dont need/never needed any financial help for outsiders before approaching for your home loan/car loan. How can should this decrease your score I fail to understand. In fact I believe the score of such individual should be very high given the fact that he/she has never taken a loan. But CIBIL looks at it differently"

    Ridiculous.. EVIL CIBIL. RBI Should take action .

    ReplyDelete

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