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Dont let errors in your Cibil credit report turn into costly mistakes

Your credit information is collected by every bank where you have a relation, be it a savings account, a current account, a credit card or a loan.

June 18, 2014 10:34 IST | India Infoline News Service
An error does not become a mistake until you refuse to correct it. Errors in your Cibilcredit report can become costly mistakes if you do not catch them in time. So next time you get your credit report, do not just see the score and tuck it away. Read it carefully and check if the data is correct.

Your credit information is collected by every bank where you have a relation, be it a savings account, a current account, a credit card or a loan. The bank keeps track of the length of your account, its usage, your payment track record and other data.

It is likely that one or more of these financial institutions may hold incorrect or outdated data on your banking /credit records. The data that the financialinstitutions hold is passed on to the credit information companies. The credit information companies simply enters this data into the records they hold about you and if your data has errors, and your credit report will be faulty.

This is exactly what happened to Sonia Das. When Sonia got married her name changes and she informed her bank accordingly. The information was processed and then her records got mistaken by another person of the same name who had a poor credit standing. And, ergo, suddenly Sonias credit score had fallen. It took some time before the credit agency could cross verify the information after Sonia put in a complaint.

It is easy enough for errors to get into your credit report. Errors lead to a faulty credit score which in turns means that your loan might be rejected or you may get higher rates.

Here are some of the common errors that you must scan for in your credit report.

1. Your personal information

Your credit report contains your personal information like your name, address, date of Birth etc. While it may seem trivial, personal information being correct means your record cannot be mistaken for someone else.

2. Some of your records are missing

Timely payments on your current loans and credit cards will boost your credit score. Make sure that all your loan accounts are reflected in your Cibil credit report as if good accounts if not reflected in credit report may bring down your credit score.

3. Your report shows incorrect credit limits

It is possible that your credit card issuer has increased your credit limit and not informed the credit bureau. A lower credit limit would mean that your account will show a high credit utilisation ratio. A high credit utilisation ratio impacts your credit score negatively.

4. Your records are not updated

It is possible that you have paid off an outstanding loan or cleared a delayed payment over 3 months but your credit report records still show it as outstandinginspite of the time it may take the bank normally to make changes in the records. This will have an adverse effect on your credit score.

The author is Co-Founder & Director, CreditVidya

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