Credit scores and credit reports

Rahul’s application for his first two-wheeler loan will be decided on a report he has never read: a ₹2,000 pay-later instalment he missed during exams is on it, along with every card and loan in his name. Four companies keep such a report on almost everyone who has borrowed in India, and each must give you the full report once a year at no charge.

This lesson gets that report, reads it section by section, works out the two ratios lenders look at, and shows how to get a wrong entry corrected, with ₹100 a day owed to you when the correction is late. It ends with the loan nobody wants to find: one taken in your name. The whole lesson is education only; Rahul, Asha and every account on their reports are invented, and no lender or bureau is recommended.

Four companies keep your credit history, and each owes you a full report every year

Lenders regulated by the RBI report every loan and card account to the credit information companiescredit information company: A company that keeps credit reports: the loans and cards in your name and how you have repaid them, reported by lenders. Lenders read the report before they lend again. More in “No-cost EMI, BNPL and subscription traps”, often called credit bureaus. The RBI has registered four of them, which its directions on credit information reporting list: TransUnion CIBIL, Equifax, Experian and CRIF High Mark. Each keeps its own credit reportcredit report: The record a credit information company keeps of your loans and cards, built from what lenders send: each account with its lender, amount, balance and repayment history, and the enquiries made on it. on you, built from what lenders send it, and each works out its own credit scorecredit score: A number that a credit information company works out from your credit report with its own model. Every company calibrates its scores from 300 to 900, so scores read alike.. Since all four calibrate their scores from 300 to 900, a score means the same kind of thing whichever bureau gives it.

The same directions give every individual whose history a company holds one full credit report, with the score, once in each calendar year, on request and after checking who is asking. It must be in electronic form, show the latest position of every lender’s exposure to you, and contain the same detail as the most detailed report lenders receive, with a link on the company’s home page. Four companies means four reports a year. Step through the sections of Rahul’s invented report:

Read the report as a list of facts to verify, not a grade. Most of what you can fix is in the details: a wrong date of birth, an account you closed still shown as open, a repayment shown late that was on time.

Lenders report four times a month, and you are alerted when it matters

A late payment does not wait for the end of the year. Under the RBI’s directions as amended, lenders submit credit information as on the 9th, 16th, 23rd and last day of every month: the accounts that changed within four calendar days of each of the first three dates, and the full file by the 5th of the next month. Two alerts keep you informed: a lender reporting a default or days past duedays past due: How many days a payment has been overdue, counted from its due date. Lenders report it to the credit information companies, and it stays in the account's repayment history. must tell you by SMS or e-mail when it submits the information, and a credit information company must alert you each time a lender’s enquiry on your report is recorded. Follow Rahul’s missed instalment:

The cadence works for you as well as against you. A repayment or a closed account reaches the report within days, and so does a card balance paid down before a reference date. Two rules from the lesson on credit cards fit here too: a card issuer may report an account as past due only after it has been past due for more than three days, and it may not report a new card at all before it is activated.

A score reads your record: what raises it and what pulls it down

Each credit information company works out its score with its own model, and the RBI’s compensation framework does not even admit complaints about how a score is computed. What every model reads is the same: the report. That makes the parts of it you control the ones that matter.

• Paying on time. Every account’s history records days past due, month by month. A missed payment stays in the history after it is paid, and every later month paid on time adds to the record.
• How much of your limits you use. Card issuers must assess a new limit against all the limits you already hold elsewhere, so lenders see your credit utilisationcredit utilisation: The share of your credit card limits in use: the balances divided by the limits. ₹45,000 owed on cards with ₹1,50,000 of limits is 30 %.: the balances on your cards divided by their limits.
• How long, and what kind. Older accounts repaid well, and a mix such as a card and an instalment loan, show how you handle different kinds of credit.
• How often you apply. Each application usually adds an enquiryenquiry: A record on your credit report that a lender or another specified user looked at it, usually because you applied for credit. The credit information company alerts you when one is recorded., and several in a short time are visible to every lender who reads the report.

A lender also asks whether a new loan fits your income, which a debt-to-income ratiodebt-to-income ratio: The share of your monthly take-home pay that goes on loan instalments: ₹21,002 of EMIs on ₹70,000 is 30 %. Lenders weigh it to judge whether a new loan fits your income. measures. The program works out both ratios for Asha, whose EMI is the one of the loan in the lesson on how loans work:

"""Asha's credit utilisation and debt-to-income ratio, worked out from invented numbers.

Utilisation is the share of the credit card limits in use: the balances divided by the limits, card by card and in
all. The debt-to-income ratio is the share of take-home pay that goes on loan instalments each month. Her EMI is the
one of her ₹10,00,000 loan in the lesson on how loans work.
"""

from decimal import ROUND_HALF_UP, Decimal

CARDS = (("Card 1", Decimal(100000), Decimal(40000)), ("Card 2", Decimal(50000), Decimal(5000)))
PAY_DOWN = Decimal(20000)
TAKE_HOME = Decimal(70000)
EMIS = (("Loan of ₹10,00,000", Decimal("21001.86")),)
NEW_EMI = Decimal(6000)


def inr(amount):
    value = Decimal(amount).quantize(Decimal("1"), rounding=ROUND_HALF_UP)
    whole = str(abs(value))
    head, tail = whole[:-3], whole[-3:]
    groups = []
    while len(head) > 2:
        groups.insert(0, head[-2:])
        head = head[:-2]
    if head:
        groups.insert(0, head)
    return "₹" + (",".join(groups + [tail]) if groups else tail)


def pct(part, whole):
    return f"{(part / whole * 100).quantize(Decimal('0.1'), rounding=ROUND_HALF_UP)} %"


limits = sum(limit for _, limit, _ in CARDS)
owed = sum(balance for _, _, balance in CARDS)
print("Credit utilisation")
for name, limit, balance in CARDS:
    print(f"  {name + ':':<8}{inr(balance):>8} of {inr(limit):>9}  {pct(balance, limit):>6}")
print(f"  {'In all:':<8}{inr(owed):>8} of {inr(limits):>9}  {pct(owed, limits):>6}")
print(f"  After paying {inr(PAY_DOWN)} off card 1: {inr(owed - PAY_DOWN)} of {inr(limits)}, {pct(owed - PAY_DOWN, limits)}")
print()
emis = sum(amount for _, amount in EMIS)
print("Debt-to-income")
print(f"  EMIs {inr(emis)} on take-home pay of {inr(TAKE_HOME)}: {pct(emis, TAKE_HOME)}")
print(f"  With a new EMI of {inr(NEW_EMI)}: {inr(emis + NEW_EMI)}, {pct(emis + NEW_EMI, TAKE_HOME)}")

Credit utilisation
  Card 1:  ₹40,000 of ₹1,00,000  40.0 %
  Card 2:   ₹5,000 of   ₹50,000  10.0 %
  In all:  ₹45,000 of ₹1,50,000  30.0 %
  After paying ₹20,000 off card 1: ₹25,000 of ₹1,50,000, 16.7 %

Debt-to-income
  EMIs ₹21,002 on take-home pay of ₹70,000: 30.0 %
  With a new EMI of ₹6,000: ₹27,002, 38.6 %

Asha owes ₹45,000 on ₹1,50,000 of card limits, 30.0 %, but one card is at 40.0 %. Paying ₹20,000 off before the next reference date brings the reported share to 16.7 %. Her EMI takes 30.0 % of her take-home pay; a new two-wheeler EMI of ₹6,000 would take it to 38.6 %, and that, more than her score, is what a lender weighs next.

A wrong entry must be fixed within 30 days, or the delay is paid for

Mistakes happen: a loan closed but still shown open, a payment shown late, another person’s account matched to you. The Credit Information Companies (Regulation) Act gives the lender and the credit information company 30 days to update your information once you ask. The RBI’s framework turns that into a clock with a price: a complaint not resolved within 30 calendar days of filing earns you ₹100 for every calendar day of delay. Step through Asha’s complaint:

Within the 30 days the lender has 21 to send corrected information, and the company the rest, so whichever of them caused a delay pays for it, shared in proportion. You may complain to either. When several lenders are involved, go to the credit information company, which must coordinate them and send one answer. Rejections must come with reasons, and the compensation is credited to the bank account or UPI ID you gave in the complaint within five working days of the resolution.

Two limits are worth knowing. The framework does not cover disputes about how a score is worked out, only about the data. And if a lender or a company wrongly refuses the compensation, the RBI Ombudsman takes the complaint, since the Integrated Ombudsman Scheme, 2026 covers credit information companies as well as banks and many NBFCs.

A loan you never took is a warning: act the same day

The worst entry is one that is not yours at all: a loan or a card opened by someone using your PAN or your documents, or an enquiry from a lender you have never approached. The alert that your report was accessed is often the first sign. Step through what Rahul does:

The order matters. Report the fraud first, on 1930 and on cybercrime.gov.in, the Ministry of Home Affairs’ portal for financial cyber fraud, because the acknowledgement number supports every later complaint. Then dispute the entry with the credit information company, and write to the lender so that it stops collecting from you. The 30-day clock and the ₹100 a day apply to this correction too.

Practise: read a report, work the ratios, use the clock

Questions here range over all five sections, from the four bureaus to a loan in your name, and the ones you have missed most come back first. Percentages are to one decimal place and money is in rupees:

Interview questions

Warm-up (fresher): How often can you see your full credit report, and what is in it?

Each of the four credit information companies the RBI has registered must give every individual whose history it holds one full credit report, with the score, once in each calendar year, electronically and after checking identity. It must contain the same detail as the most detailed report lenders get: your personal and contact details, every loan and card with its lender, amount, balance and repayment history in days past due, and the enquiries lenders made. Scores run from 300 to 900 at every company. Since there are four companies, a person can read four full reports a year, for example one every three months.

Warm-up (fresher): What can you do if your credit report shows a mistake?

Complain to the lender or to the credit information company, with proof such as a closure letter. Under the Credit Information Companies (Regulation) Act and the RBI’s framework, the lender has 21 days to send corrected information and the two together have 30 calendar days from your complaint. After that you are owed ₹100 for every calendar day of delay, paid to the bank account or UPI ID you gave within five working days of the resolution. If the compensation is wrongly refused, the RBI Ombudsman can take the complaint. Disputes about how a score is computed are outside the framework; it covers the data.

Key takeaways

• Four credit information companies keep reports built from what lenders send, score on a common 300 to 900 scale, and must each give you a full report with the score once every calendar year.
• Lenders report as on the 9th, 16th, 23rd and last day of every month, and you are alerted when a default is reported and whenever a lender’s enquiry is recorded.
• Scores are each company’s own model reading the same report: repayment on time, the share of limits used, the length and mix of credit and recent applications; Asha’s utilisation is 30.0 % and her debt-to-income 30.0 %.
• A wrong entry must be corrected within 30 calendar days of your complaint, 21 of them for the lender, or you are owed ₹100 a day, and the RBI Ombudsman hears a wrongful refusal.
• A loan or enquiry you never made is reported on 1930 and cybercrime.gov.in first, then disputed with the company and the lender.