Can you imagine an internet service-provider buying or borrowing bandwidth from an established player and selling it dirt-cheap to customers? Well, this is what is happening right now in the credit information and credit score space. Bajaj Finserv has launched Credit Pass, a credit monitoring tool that gives unlimited access to monthly credit score updates for as low as Rs59 for six months or at Rs99 for a comprehensive premium plan for 12 months. Bajaj Finserv's Credit Pass is powered by TransUnion CIBIL Ltd (formerly Credit Information Bureau (India) Ltd- CIBIL), India's largest credit information company. However, CIBIL also sells its subscription plans starting from Rs550 per month to Rs1,200 for a year.
Interestingly, Bajaj Finserv's Credit Pass offers almost the same things that CIBIL provides. Bajaj Finserv's Credit Pass offers a personalised credit dashboard, monthly CIBIL score updates, credit factors tracking, credit health reports and predictive tools like a credit score simulator (under the premium plan). Anyone can subscribe to Credit Pass.
CIBIL also offers unlimited access to a dashboard, score simulator, personalised loan offers, and 24x7 credit monitoring with email and SMS alerts.
CIBIL, as a credit information company (CIC), is regulated under the Credit Information Companies (Regulation) Act. Bajaj Finserv, on the other hand, is an unregistered core investment company under the core investment companies (Reserve Bank of India—RBI) direction. Bajaj Finserv is the parent of Bajaj Finance Ltd and holds a 74% stake each in Bajaj Allianz General Insurance Company Ltd and Bajaj Allianz Life Insurance Company Ltd.
From the point of view of end-users or financial consumers, there are two important points to consider before buying Bajaj Finserv's Credit Pass. First and most important, while you may see your credit score updates or credit health dashboard, Bajaj Finserv cannot help you in case of wrong data or credit scores. This is because it is the job of credit information companies like CIBIL. However, CIBIL cannot make any change in the credit information report (CIR) unless the respective bank or financial institution confirms the information.
Knowing the credit score helps in getting a loan on better terms. If the score is low, one can take corrective action and follow the right steps to improve the credit score as well.
Secondly, credit information companies are mandated to protect the privacy of customer data. Section 29(1) of the CIC Act states: "Every credit information company shall observe, except as otherwise required by law, the practices and usages customary among credit information companies, and it shall not divulge any information relating to, or to the affairs of, its members or specified users."
However, this may not apply to Bajaj Finserv since the company does not fall under the CIC Act.
Interestingly, Paisabazaar.com also allows registered users to check and download credit reports online for free. "We have a partnership with all four leading credit bureaus, including CIBIL, that enables you to check, track and build your credit score at absolutely zero cost,"
Paisabazaar says.
Many banks and financial institutions which are members of credit information companies like CIBIL, also offer free credit scores to their customers. For this, they seek authorisation from the customer to run a credit score check on the customer profile. The only issue is that they also seek blanket permission to be contacted by their representative over the phone or email.
Most loan spam callers in India notoriously use the name Bajaj Finance with ease and social media is inundated with complaints about relentless spam calls and sales calls by company agents. Despite efforts by the telecom regulator, there is no respite for mobile or phone users from the spam menace. So be careful before sharing your mobile number or email ID with any unauthorised entity to obtain anything, including your credit score, free.
Given the importance of the credit report in an individual's financial matters, RBI, through a notification dated 1 September 2016, made it mandatory for all four credit information companies in India to provide one free credit report, including credit score, once every year (January-December), to individuals on request in case their credit history is available with the CIC.
The free credit report provided is detailed and includes the same information provided to banks and other lending institutions. This practice is in line with the global practice, where all credit bureaus are mandated to provide one free credit report annually. (
Read: How To Get Your Credit Report for Free?)
Interestingly, at the start of this year, RBI held a meeting with CICs, raising concerns about them utilising customer data for consulting and analytical purposes. CICs also have a fiduciary role and it is unclear what checks & balances are employed in sharing customer data and access to credit scores with financial services companies.
We sent an email to CIBIL asking if the CIC is ready to share its data with other financial market players who can offer services like Bajaj Finserv's Credit Pass, whether Bajaj Finserv will get access to customer data shared by all financial institutions to CIBIL and how the CIC will handle privacy and data safety concerns of the customer. We have not received any reply from CIBIL till writing this story. We will update this article with their reply as and when we receive it.
