It has not been long ago when people, in general, were not even aware of the existence of credit bureau. However, over last five years that the presence and its importance is being felt by the citizens of India, they are trying to find more and more about the functionalities and their impact on the credit profile. Thanks to the Internet, people are able to search and research a lot on every topic that may cross their mind. However, all the information available on the Internet may or may not be relevant to them.
We all know that the credit bureaus are lot more evolved in western economies. Given the fact they have been present for over 50 years in those countries, they are much more evolved and a lot of literature is available for people to go through. However, that is not true to our country. The effective presence of a bureau is aged just about a decade. And when our people still refer the credit score as CIBIL score (CIBIL is just one of the four bureaus in India: others being Experian, Equifax and Crif Highmark) they may misunderstand and may get alluded from the available details.
One of the common queries that we come across is if the utility bills and rent of house get included in the credit report? Does payment of these bills impact the credibility of an individual? Let us address this in two parts.
First being an understanding of the structure of bureaus in India. As per the Credit Information Act 2005 there only a few entities those are entitled to have access to the available data and also contribute to this base. Apart from the banks and other lending institutions approved by the Reserve Bank of India, the following are the entities that are approved for accessing the data base.
Here as we observe, only large entities have the authority. The much larger property market in India till recent past did not even have a regulator. And even now it does not form part of the above list. In this context, the rental payments getting reported, seem to be a long shot. While it is definitely slated to happen, but how long will this take is anybody’s guess.
Second, the while the above have the authority to ping the data and report their subscribers, the same is not happening. While TRAI is also one of the registered users of bureau base, it does not so far run an enquiry or report to the bureaus. The other utility providers like electricity boards, water supply, cooking gas suppliers are also quite fragmented. Multiple providers spread over different states with the government, semi government and private players all being the providers, it is nearly impossible at this point of time to have these to be given access to the data base.
Having said that, one needs to understand that the repayment of obligations, while they may or may not be getting reported to the bureau, is of high importance. It is imperative that one pays all his dues in time. Non payment of a few can lead to one becoming habitual defaulter on due dates. This can lead to delayed payments on loans and other credit instruments as well. As a result, one’s credit score will deplete and lead to getting a high personal loan interest rate being charged.
As of now the utility bills and rent payments do not form part of the credit report. However, it is just matter of time when these will also start getting reported and impacting one’s credit profile.
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