Educating Myself for My Education Loan

What if you wake up one day and no one trusts you? You can no longer buy the swankier car or that beautiful home you dreamt of. Have you ever had such thoughts? I have had, not very long ago. It was the monsoon of 2011 and India was witnessing some of the defining moments of the decade; Euphoria of India winning the Cricket World Cup, Mass mobilization against corruption inspired by Anna Hazare and Mumbai turning into a hot hunting ground for terror. Amidst all these, my heart was racing faster for my achievements of scoring 700+ in GMAT, grant of Scholarship from Wharton School and Said Oxford. I had landed in the kingdom of dreams. A dream of a joining a top 10 global MBA program bloomed.

Maroon 5 was right when they sang “Nothing lasts forever”. Before I could even climb the next ladder for my dreams, they were thrashed like the storyboard that had been tipped and jumbled, disjointing the order and twisting the timeline. Banks had refused to fund my remaining fees of 60 Lakhs for the education. I was being denied an opportunity because no one seemed to trust me.

Begging was the only form of request I hadn’t resorted to when I met Mr. Nelson, who rather than just rejecting my request, gave me a reason for not being able to help me. He told that my credit score was in the 500s, generally considered as a poor credit score, categorized as High-Risk Applicant by the Credit Bureau, and since it is one of the most important factors in the loan approval decision, no bank will consider giving me a loan with such a credit score.

I couldn’t rely on my heritage as both my parents are loan averse and had even discouraged me to apply for one. I realized that this new unknown “credit score” was standing between me and my dream. It was bizarre as I hadn’t heard of any such concept in the years of my preparation, not from any of my peers, not in any online forums, not in the coaching institutes, never. Having worked for top financial institutions and having traded in derivatives and share markets, I used to consider myself among the frontrunners in financial literacy. And, here I was not even aware of what a Credit Bureau was and what a Credit Score was, a part of the financial world which was about to change the course of my life.

On my way back home, I browsed through the internet to understand what a Credit Bureau was and why is the credit score so important. It was a sort of revelation to understand how critical credit scores are to lending and how most people like me aren’t even aware of it. I was of the view that I could find a way around this credit score and convince officials to grant me the loan, but then I knew, the only option left was to work on my credit score and park my dreams for the time being.

850. That was the number printed on my latest CRIF Credit Report. It’s an excellent credit score which is loved by every bank or lender I speak to. Today not only I am credit worthy, but I can ask for preferential interest rates on my loan. How did I get here? To unlock the trick or secret to an excellent credit score, read my next blog How I Raised My Credit Score By 250 Points.

About the Author: Subhankar Mishra works as Service Delivery Manager at CRIF High Mark, the only comprehensive Credit Bureau in India.

Banking Ombudsman

Did you ever fight with your elder brother during your childhood? Whom did you go for the resolution? Your mother, right. However, we are sure that many times, you would have reached out to your father against the resolution made by your mother. Our families implicitly carry their own mechanisms to address and resolve complaints or grievances.

Given the number and the variety of interactions we engage with banks today, some of us are likely to have complaints or grievances against the services offered by the banks. Though such hierarchy for resolving complaints and disputes comes naturally into our homes, Reserve Bank of India (RBI) has defined such hierarchy for redressal of customers grievances through Banking Ombudsman Scheme, 2006.

According to the said scheme, any person who has a pending complaint against his bank in terms of deficiency of services or in respect of loans taken or not following fair practices etc may file a complaint online with the Banking Ombudsman appointed by RBI to get the issue resolved. RBI has appointed about 20 senior officials as Banking Ombudsman, one in-charge for a one or more states, for assisting you with your complaints.

The guidelines require the complainant to first exhaust the grievance redressal avenues within the bank such as writing to bank’s customer service desk or to the bank’s nodal officer and then only approach the Banking Ombudsman. The complainant may approach Banking Ombudsman in case he has not received any reply within a period of one month of the complaint or the complainant is not satisfied with the reply given by the bank.

While the Banking Ombudsman Scheme 2006 covered almost all types of banks operating in India, the RBI recently announced an Ombudsman setup for NBFCs for helping consumers with complaints against any service deficiencies of large NBFCs.

How about complaints on your credit report?
You may notice an error in your credit report which may be affecting your credit score as well, and thus your ability to take a loan for your needs. Since CRIF deals with a large amount of data emanating from many banks and other financial institutions and further, in respect of many borrowers, an inadvertent mistake in your credit report cannot be ruled out completely. Read more to understand how credit bureaus work.

Whenever you face such a situation, you may write to us highlighting the discrepancy along with the unique Report ID on the right top corner of your CRIF Credit Report. If you wish to enclose supporting documents, you can write to crifcare@crifhighmark.com. Our customer team ensures that your concerns are heard promptly. Technical issues, if any, are addressed at the earliest and a revised credit report is thereafter issued at no extra cost to you.

In case the issue is with the data provided by the bank to CRIF, we forward the issue to the concerned bank requesting a correction. At the same time, CRIF also requests you to directly take it up with the concerned bank to help expedite the correction. CRIF continues to follow-up with the concerned bank to support you with this correction. As soon as CRIF receives a confirmation for correction, we update our records and share a revised CRIF Credit Report with you.

Even though CRIF strives to offer best standards of customer service, in case you are not satisfied with the response from our customer service desk, you can escalate the matter to CRIF Nodal officer by writing to nodalofficer@crifhighmark.com.

If you do not hear from CRIF or the bank within a reasonable time of 30 working days, you can also approach the Banking Ombudsman for the said discrepancy.

Always at your service! Read FAQs on Banking Ombudsman