The Indian credit industry has experienced significant growth and transformation over the past decade, driven by the rapid expansion of digital lending, increased financial literacy, and government initiatives promoting financial inclusion. As of 2025, the credit industry is valued at approximately Rs 175 trillion, with a year-on-year growth rate of 11-13%, reflecting the rising demand for credit

Credit Bureaus and Financial Institutions play pivotal roles in facilitating growth by enabling access to credit, assessing risk and ensuring financial stability. However, despite these advancements, the industry faces numerous challenges that hinders its potential. Among these challenges, issues surrounding the comprehensiveness and accuracy of credit bureau reports stand out as significant hurdles

One of the most pressing challenges in the credit industry is the lack of comprehensive information in credit bureau reports. This issue arises from several interrelated factors, including the challenge of lenders to share detailed and accurate data and systemic limitations in data collection and standardization.

The Credit ecosystem in India relies heavily on credit bureau reports to assess the financial credibility of borrowers. These reports play a crucial role in determining loan approvals, interest rates, and other financial terms. However, the credit bureau system is not without its flaw. Borrowers often face challenges due to inconsistencies, inaccuracies and lack of comprehensive data in credit reports. These issues not only impact borrowers but also affect the overall efficiency and fairness of the lending industry

Credit bureau reports often fail to provide a complete picture of a borrower’s financial obligation. Beyond all of this lack of transparency arises from several interconnected factors such as privacy concerns, regulatory ambiguities and operational challenges

The Data Quality Index (DQI) is a tool used by the Reserve Bank of India (RBI) to assess the accuracy of data submitted by lenders to Credit Information Companies (CICs). The DQI is used to improve the quality of data submitted by lenders and dedupe logic for Credit Bureaus.

The bigger question is who will score the Credit Bureaus regarding the discrepancies in the credit score and credit history. These problems complicate the decision-making process. Wherein, if the lender is evaluating the borrower using reports from different bureaus may arrive at conflicting conclusions about creditworthiness, leading to inconsistent credit approvals. For borrowers, this variance often results in frustration and mistrust.

This inconsistency also highlights the need for better standardization and transparency within the credit reporting industry to ensure fairness and reliability in credit assessments.

The Regulator should step up and urge industry stakeholders, policymakers and financial institutions to collaborate on the adherence to recent Master Direction – Reserve Bank of India (Credit Information Reporting Directions, 2025) which will help to transform the credit landscape in India, ensuring that all borrowers have fair access to credit opportunities and fostering more inclusive financial future.

As we look ahead, embracing innovation and cooperation will be crucial in overcoming existing barriers and adapting to the evolving needs of consumers.

By prioritizing these efforts, the Regulator can create a robust credit environment that supports economic growth and empowers individuals to be credit healthy across the country.