CIBIL Score : The Finance Ministry has clarified that banks cannot reject your loan application solely on the basis of your credit score. Instead, they must also use alternative methods to assess your repayment capacity.
This announcement comes as a major relief for millions of people who are looking to apply for a loan for the first time. Minister of State for Finance, Pankaj Chaudhary, informed the Lok Sabha that the Reserve Bank of India (RBI) has not set any minimum credit score requirement, especially for first-time borrowers.
On January 6, 2025, the RBI issued a Master Direction stating that banks and financial institutions cannot reject loan applications merely because the applicant has no prior credit history. However, this doesn’t mean loans will be granted without proper scrutiny. Banks will still carry out a thorough assessment of the applicant’s repayment ability and overall financial reliability.
They may review factors such as your Credit Information Report (CIR), repayment track record of past loans, loan settlements, restructuring history, or any defaults. These checks help lenders evaluate risk, even when the applicant has no CIBIL score.
Credit Report Fee Capped at ₹100
According to RBI guidelines, the maximum fee for obtaining a credit report is ₹100. Additionally, individuals are entitled to receive one free credit report (including credit score) every year, provided they already have a credit history.
CIBIL Is Not Being Shut Down
Amid speculation about the future of CIBIL, the government has made it clear that CIBIL is not shutting down nor being replaced by any government-run agency. CIBIL and other credit information companies will continue to operate under the supervision of the RBI.
This new policy is expected to make the loan system more inclusive. Now, individuals without a credit history—particularly young people and small entrepreneurs—will find it easier to access credit. Over time, this will help them build their credit history, while also supporting broader economic growth.
