The Reserve Bank of India’s (RBI’s) moratorium on payment of equated monthly instalments (EMIs) ended on August 31. Many borrowers had deferred their EMI payments from March till August, with the assurance that their credit score would not be impacted.
Manu Sehgal, business development and strategy leader, Equifax India, says, “The RBI had specified that taking an EMI moratorium would not qualify as default for the purpose of reporting to credit information companies (CICs) by the lending institutions.”
Media reports indicate that many borrowers’ credit scores have slipped after they availed of the moratorium, despite the RBI’s rule.
A CIBIL spokesperson says, “Lending institutions do not flag consumers who may have opted for a moratorium when they submit data to the credit bureau.” Hence, the bureaux don’t have any insight on which customers have opted for a moratorium.
If your score has been impacted negatively, know the reason. Sehgal says, “Your credit score may have been impacted for a number of reasons — applying for new credit or increase in credit utilisation rate.” If you took one type of credit during the lockdown, your score will be impacted (it’s advisable to take a mix of secured and unsecured credit).
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