Can CIBIL Credit Score be allotted without accessing ITR?

Can CIBIL Credit Score be allotted without accessing ITR?

Being a Credit Consultant, I am being contacted by thousands of individuals every month not only at my physical location but on the online platform also for solving their CIBIL Problems, I have critically examined more than 5000 Credit Reports from all the following four Credit Rating Agencies working in India:

  • Credit Information Bureau of India Limited (CIBIL)
  • Experian Credit Information Company of India Private Limited (Experian)
  • Equifax Credit Information Services Private Limited (ECIS)
  • CRIF High Mark Credit Information Services Private Limited (CRIF)

On the basis of my deep analysis, problems being faced by the Individuals, Firms and Companies, Lending Bankers and NBFC, I have reached a conclusion that everything is neither fine with the Credit Rating Agencies nor with the Lenders for providing error fee Credit Reports to the Lenders or Individuals and Companies. The following types of errors are common in the Credit Reports:

  • Defaulter Borrowers escaping the eyes of the lenders as their bad accounts are not reflected in the Credit Reports. This is happening because the data of chronic defaulters is not correctly and perfectly reported to the Credit Rating Agencies. In my opinion, all the Banks and NBFCs must fetch the Credit Reports of their defaulter borrowers and borrowers whose loan accounts have been “written off”, “settled” or “restructured” and in case the loan accounts are not reflecting in the CIBIL Reports then they must finetune their feeding of data like PAN, Aaadhar, Passport, Voter ID and/or Driving Licenses in such a way that such account start appearing in Credit Reports. Credit Bureaus started operating in India in 2004 as per Act of 2000 and all the Banks and NBFCs reported only the loan accounts outstanding as on 2004 and the loan accounts closed before 2004 got a General Amnesty If the lending institutions report cent percent correct reporting to all the above Credit Rating Agencies then it will take at least 20 years to clean the Credit Reporting System in India. Banks in India are neither making the Guarantors/Join Borrowers of Loan accounts accountable religiously nor are they feeding the data of suit filed/decreed/deceased loan accounts into PAN/Aadhar data of the Legal heirs of all such suit filed/decreed/deceased loan accounts. I have seen defaulter families checking their CIBIL Reports and apply for Loans in the name of family members who have never taken loans. I have seen farmers/agriculturists/businessmen shifting the business in the name of their clean family members with an intention to just dodge and cheat the Banks and NBFC’s. It is more amusing that the Field Loan Staff of the Banks and NBFCs give such advice to the individuals. In my opinion, there should a mechanism to fetch CIBIL Reports of a Family as a unit comprising of Head of the Family and all other Major Co-parceners.
  • I have seen Credit Reports of Individual having more than 800 CIBIL Scores and they have been able to secure loans in lacs and crores whereas they have no source of income or their income as per ITR, which determines their repaying capacity, is very low. It clearly implies that such Credit Seekers are not only dodging the Banks and Lending Institutions but also dodging the Income Tax authorities by repaying the heavy loans from Black Money sources. How come that Credit Rating Agencies can ignore the ITR Repaying Capacity of the Credit Seekers. In one of my articles on the web, I had suggested that there should be Credit and Debit Information Bureau of India Ltd on the lines of CIBIL and  CIBIL or DIBIL should have access to ITR records of the Loan Seekers so as to allot Scores on the basis of remaining repaying capacity of the loan seeker. Similarly, Income Tax authorities should have access to the CIBIL and DIBIL records of the PAN Card Holders who might not be filing any ITR. Finance Ministry, Department of Banking, GOI must look into the pros and cons of having Credit and Debit Information Bureau of India.
  • Banks and Lenders, while fetching or enquiring into the Credit Reports, just put in Random Data of Loan Requested amount as 10000 even if the loan seeker is seeking a loan of 100 lacs. The amount of enquiry should be the actual amount so that CIBIL Score systems take into account the existing loans and fresh loans for which inquiry is being made. How can the same Credit Report be applied for a Loan Amount of Rs.50000 and Rs.50 lacs? Banks and Credit Bureaus R and D department must look into this aspect.

GOI must enact a Law to Protect the Genuine Borrowers:

  • In the United States of America, the borrowers termed as consumers of Credit Rating Agencies are given statutory rights under the Federal Fair Credit Reporting Act but in India, there is no act or law to protect the rights of Genuine Borrowers against misreporting by Banks and Lending Institutions, Deleting unverified, incomplete and obsolete information in Credit Reports. Daily I am visited by dozens of Individuals, who are declined the loans merely on the ground that some loans are appearing in their Credit Reports which are either in default or are counted by the lending banker to judge their repaying capacity whereas they have nothing to do with the loans appearing in their Credit Reports. I call it Strangers’ Loan Accounts which are removed by the Credit Rating Agencies after a long fight with the Lending Bankers and Credit Rating Agencies.
  • Different Credit Rating Agencies report different Scores and there is neither and uniformity nor any explanation for the CIBIL Scores. In my opinion, the Scoring Pattern should be transparent and Scores should be allowed to be calculated manually also. I have seen reports of the individuals where CIBIL Scores changed drastically lower without any valid reason thus damaging the Credit Reports of the Loanees and Loan Seekers.

Breaking News about PAN and ITR for AY 2018-2019:

While I was just writing this article I got the news that the CBDT Government of India has extended the deadline of 30-06-2018, for Linking their PAN with Aaadhar, which expired last midnight, for the 5th time to 31st March 2019 without levying any Penalty for not Obeying the GOI Instructions repeated and extended 4 times.

I had suggested the CBDT, GOI to levy a token Penalty of say Rs.50-00 only for Linking the PAN with Aadhar after the earlier 4 deadlines as if the disobedient citizens are not penalized, then it will have a demonstration effect on those obeying the GOI instructions in the 1st instance. Had the GOI levied penalty after the expiry of the deadline for the first time, I am sure by now all the PAN Cards would have been linked with the Aadhar Cards.

Anyhow through this extension of deadline up to 31st March 2019, the GOI through CBDT has killed two birds with one stone as nobody will be able to file ITR for AY 2018-19 without linking PAN with Aadhar and the Last date of Filing which is 31-07-2018 is drawing near. The CBDT has already clarified that Penalty of Rs.5000-00 will be added u/s 234F in the ITR itself for those who file their return online during the period 01-08-2018 to 31-12-2018 and Physical ITR will be accepted only after depositing the Late Fees of Rs.5000-00. Late Fees will get enhanced automatically during the period 01-01-2019 to 31-03-2019. As the persons, who fail to link their PAN with Aadhar by 31-07-2018 will be debarred from filing their ITR for AY 2018-2019 virtually bringing them in the Penalty u/s 234F after 31-07-2018. As such do not wait till the Fresh Deadline of 31st March 2019 as the GOI through CBDT has laid the honey trap to penalize you indirectly for not linking your PAN with Aadhar.

What to do if Your Pan is not Getting Linked with Aadhar:

No Cause of worry for genuine PAN Cardholders who are not able to link their PAN with their Aadhar as you can still file your ITR before 31-07-2018 even Without Linking PAN with Aadhar.


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