You do your best to maintain a stellar credit score. You pay your bills on time, maintain a balanced mix of secured and unsecured credits, keep your credit usage low and settle your credit cards bills in full every month. Despite taking all these steps, there may be chances that your credit score could be lower than expected.
The surprising reason – mistakes on your credit report. In India, credit scores are generated by the big four – Equifax, Experian, TransUnion CIBIL™ and High Mark. These credit bureaus gather data from billions and billions of credit transactions and calculate the credit score and reports of millions of Indians.
Though the credit bureaus are meticulous, they are not error-free. An error on your credit report – either made by the lender or credit bureau – can hurt your credit score, making it difficult to qualify for loans and also increases your borrowing rates. You need to learn how to spot the most common errors on credit reports and get them rectified as early as possible.
Which errors on your credit report impact your credit score? How do you fix credit report mistakes? Read on to find the most common credit report errors and learn how to spot them.
Top Credit Report Errors in India
Errors on your credit report can be classified into different categories. They include:
- Identity Errors
These are errors related to the individual’s identity, such as the misspelling of the name, incorrect contact details, etc. Common mistakes under this category include:
- Mistakes in the spelling of the name of the individuals
- Mistakes in address (old address, spelling mistakes, incomplete address)
- Mistakes in contact details (missing email ID, old mobile number, etc.)
- Mistaken identity – mixing up your name with the name of another person, etc.
Identity errors are the easiest to rectify. All you have to do is provide valid identity proof with the correct name, address, contact details, and the credit bureau will correct these errors.
Identity errors may also be a result of identity theft. So, you have to be cautious and get it sorted at the earliest.
- Account Errors
Some common types of account errors on a credit report include:
- Reporting a closed account as open and vice versa
- An account that is reported as late, even after timely payments
- Mistakes in reporting the status of the account: closed as settled, closed as written-off, etc.
- Reporting you as the owner of an account, where you are just the co-user.
- Incorrect account dates like date of account opening, date of first delinquency, date of last payments, etc.
- Balance Errors
These include mistakes with the balance contained in the account like:
- Incorrect account balance
- Incorrect credit limits, etc.
- Duplicate Errors
On closer inspection of your credit report, you may find a particular debt listed several times, or late payment may be reported twice and so on. Very often, duplicate errors occur when you switch lenders, and there is a miscommunication between lenders.
- Fraudulent Transactions
These include accounts or debts falsely reported under your name when you have not applied for them at all. You need to watch out for:
- Unknown debts listed under your name
- Unknown transactions in your name
- Data Management Errors
This includes errors like:
- Reinsertion of wrong information after you had it corrected
- A debt account that appears multiple times
How to check my credit report?
Your credit report is a summary of your credit transactions. It helps lenders decide whether they should extend credit to you and at what terms. To fix errors on your credit report, you need to first get a copy of your latest report. In India, credit reports are generated by four major credit bureaus:
- High Mark
- TransUnion CIBIL™
It’s important to check your credit score and report from all bureaus as they contain slightly different information. You can get one free copy of your credit report from these bureaus once a year. To get your report, you will have to create an account with the bureau, answer a few simple questions and generate the latest report.
Alternatively, you can check your credit score and credit health for free on trusted sites like CreditMantri. You can also get your latest credit report by paying a nominal fee.
What should I do if I notice any errors on my credit report?
Finding a mistake or an error on your credit report may feel overwhelming. But, worry not. You can get it rectified by following the steps listed below.
- Report the error to the credit bureau that issued the credit report. The easiest way to file a dispute is online. All the major credit bureaus have an online dispute resolution form that makes it easy to file a complaint. Alternatively, you can also send an email or a handwritten letter to the bureau. However, these options take a longer time.
- While filing the claim, explain the mistake and why you consider it as an error. Make sure to back-up your requests with the right documentation. Suppose your name is misspelt. In that case, you can support it with your Aadhaar, Pan Card or any other official document.
- Make sure to provide the right contact details while filing the claim. This makes it easy for the credit bureau to reach out to you if they want further clarifications from your side.
- The next step is to reach out to your lender. Let them know that you have found an error in your credit report. Request them to raise the complaint with the credit bureau on your behalf.
- If you suspect that the errors in your report are due to identity theft, then request the bureau to issue a fraud alert on your account. This will alert lenders, making them tighten your account security and prevent further identity thefts.
- Once you have filed the dispute online, the credit bureau will investigate your claim. If found correct, they will make the necessary changes and remove the error from your report.
Wrong information on your credit report can cause your credit scores to drop. Even if they don’t impact your credit score directly, they can act as red flags, making lenders hesitate before sanctioning your loan request. The good news here is that you can fix the errors on your credit report quickly. If you come across any mistake, report it to the credit bureau and get it rectified as quickly as you can.
Small mistakes on your credit report may not seem important, but they could be the deciding factor the next time you apply for a loan or credit card. So, use the steps listed here and get them corrected as soon as possible.
Also Read about : Donut Boxes
A mistake on your credit report is not your fault. But failing to notice and rectify it is your fault.
Keeping a close watch on your credit report can help you identify and rectify errors at the earliest. Use the tips listed here to monitor your credit score and credit reports regularly. Stay credit healthy and get wealthy.