A reader of CardBhai.com Wrote the following,
I believe CIBIL report / score is an excellent tool in hand of lenders today however the benefit is just for lenders and is not being passed on to actual customers. Additionally few of the practice CIBIL follow is outright unethical. Let me try to detail these two points below:
1. A good credit score does not mean you will get a cheaper loan today. It saves lenders by allowing them to lend only to good customers with high score improving there NPA's but they do not reduce interest for good customers (one sided business model). This is not how credit bureau works in other countries.
2. Settlements or write-off can stay forever in your credit report (I know it's only permitted to stay for few years but I believe it will stay forever) as it is calculated from the day of last reported / certified date and not from the day account was settled or write-off or defaulted. This permits lenders to use a loop hole by reporting/certifying your account as long as they want and hence these things will stay. This is not how credit bureau works in other countries.
PS: I have 850+ score and using credit cards from past 10 years. I see lot of values in credit bureau once it's fair and benefit is passed on to both lenders and customers.
You are absolutely right. As of now it is only helping the lenders. Maybe once lenders are tired of bad debts they will start chasing people like you with offers :-)
