A high credit score opens doors to better financial opportunities, like securing loans or getting approved for credit cards. However, your credit score is only as good as the information on your credit report. In this article, we will walk through the most common credit report errors and how to address them.
Before we embark on this journey, let us briefly touch upon what a credit report entails. Your credit report, also known as a CIBIL Report, is a detailed summary of your credit history. It includes information about your credit accounts, payment history, credit enquiries, and public records like bankruptcies or defaults. Lenders use this report to evaluate your creditworthiness and determine your eligibility for loans, credit cards, and other forms of credit.
Types of credit report errors
Incorrect personal information: The most common type of error occurs when your personal information, such as name, address, or contact details, is inaccurately recorded. This might seem minor, but it can lead to confusion and potential identity-related issues.
Identity theft and fraudulent accounts: In today's digital age, identity theft is a real concern. Fraudsters may open accounts in your name without your knowledge, leaving you with a damaged credit score and a financial mess to clean up.
Inaccurate account details: This type of error involves discrepancies in your credit accounts. It could be an erroneous reporting of an account that is not yours or incorrect information about your account balance, credit limit, or payment history.
Duplicate accounts: Sometimes, lenders inadvertently report the same account multiple times, artificially inflating your credit utilisation and potentially harming your credit score.
Late payments or missed payments: Mistakes in recording your payment history can result in wrongful penalties, portraying you as a riskier borrower than you actually are.
Settlements or closed accounts: If a settled or closed account still appears as open or unpaid, it can significantly impact your credit score and create problems when applying for new credit.
Inaccurate credit enquiries: Too many credit enquiries can hurt your credit score, but if some of them are not genuine or inaccurately listed, it is essential to have them rectified.
Inaccurate credit limits: Credit limits reported on your credit accounts might not always reflect the actual limits set by your creditors. This discrepancy could impact your credit utilisation ratio, which, in turn, affects your credit score.
How to correct credit report errors:
If you discover any errors on your credit report, do not fret. The process of rectifying credit report errors can be streamlined with these steps:
Review your credit report regularly: Monitor your credit report regularly to spot any errors as soon as possible. You are entitled to one free credit report per year from each of the major credit bureaus in India.
Verify personal information: Double-check your personal details for accuracy. If you notice any discrepancies, contact the credit bureau to rectify them.
Scrutinise account details: Examine each credit account listed on your report. Ensure that the information, such as outstanding balance, credit limit, and payment history, matches your records.
Dispute inaccuracies promptly: If you find errors, contact the credit bureau responsible for the report. File a dispute with them, providing any necessary supporting documents to back up your claim. The bureau must investigate the matter and respond within a reasonable time frame.
Coordinate with creditors: If the error is due to a mistake on your creditor's part, reach out to them directly. Ask them to update the correct information with the credit bureau.
Stay organised: Keep records of your communications with credit bureaus and lenders regarding any disputes. This documentation can be valuable if the issue persists.
Maintaining an accurate and healthy credit report is vital for your financial well-being. To ensure that you build and maintain creditworthiness effectively, consider signing up for the Bajaj Finserv Credit Pass. This unique membership programme offers access to seamless real-time monitoring of your Credit Health Report, including the factors that influence your credit score, and monthly CIBIL Score checks. By tracking your credit accounts and reviewing them regularly, you can effectively spot discrepancies and address them promptly to avoid financial headaches down the road. Take proactive steps to build a solid credit foundation by signing up today!
