Credit Report Errors: A good credit score is very important if you want to take a loan these days. This score depends on your credit report. But if there is any error or outdated information in it, the loan may be rejected. You will have to understand how to identify and correct these errors. This guide will help you so that your loan application process is smooth.
Role of Credit Report in Loan Approval
Banks and lenders make loan decisions based on their credit policy. This largely depends on the credit score provided by Credit Information Companies (CICs) such as TransUnion CIBIL. If there are errors in the credit report, whether it is outdated data or incorrect information, it can negatively impact your score and may end your loan eligibility. Correcting these errors requires a structured approach.
Common Credit Report Errors
1. Wrong Personal Details:
• Mistakes in name, address, date of birth, PAN, or contact details can create identity confusion and ruin your credit report.
2. Wrong Account Information:
• If you have closed a loan but the lender has not updated it, it shows your borrowing history as bad.
• Wrong ownership errors, where someone else’s loan is listed in your name, negatively impact your profile.
Why is it important to check your credit report regularly?
Credit reports are updated every 30-45 days. Regular checks can help you identify the following mistakes:
• Typographical errors (such as mistakes in name or address).
• Unupdated status of closed accounts.
• Wrong loan ownership or other discrepancies.
Even a small mistake can lead to loan rejection. So it is important to be proactive
Steps to fix credit report errors
1. Report the error to the lender:
If you find any mistake, like a closed account still showing as open, report it to the lender. The lender will update the information with the CIC and your report will be corrected.
2. Raise dispute to credit information companies:
There are 4 CICs in India: TransUnion CIBIL, Equifax India, Experian India, and CRIF High Mark. Process to raise dispute:
• Step 1: Go to the CIC website (such as www.cibil.com) and create an account or login and download your credit report.
• Step 2: Click on ‘Dispute Centre’ in ‘Credit Reports’ section and select ‘Dispute an Item’.
• Step 3: Choose the specific section in which you have a dispute.
• Step 4: Enter the disputed amount for monetary disputes.
The system validates the dispute and assigns a lender. CIC updates the status within a month.
What happens after raising a dispute?
1. Verification:
• CIC contacts the lender and verifies the disputed information.
• The disputed section in your credit report is marked with the ‘Under Dispute’ tag.
2. Resolution:
• If the lender admits the mistake, CIC updates the report and informs you.
• If the lender does not admit the mistake, no changes are made and the ‘Under Dispute’ tag is removed.
Tips to maintain an accurate credit report
• If there is any change in your personal details, update your credit institution.
• Check your credit report regularly and identify errors at an early stage.
• Address mistakes immediately to avoid problems in loan applications.
By being vigilant and proactive, you can make your financial history reflect your needs and ensure hassle-free loan approvals.
