28-Apr-2018 written by : FSI-Team
Imagine this. You apply for a home loan after you have made all arrangements for the down payment and have set your heart on the dream house. You have all your papers in order and go to your chosen bank's branch to submit your application. You wait with bated breath for your loan to get approved.
However, instead of the phone call you have been expecting announcing the approval of your loan; you receive another phone call from the loan officer stating that your application has been rejected on account of a poor credit score. Worse still you may have been marked as a loan defaulter and the bank may refuse to accept any further loan applications from your end.
Hoping it is a nightmare, as you are pretty sure that you have done everything to maintain a high CIBIL score, you frantically pull out your credit report in panic mode. You report indeed show that your score is low on account of late payments of some credit lines. On closer scrutiny however, you find that these loan or credit card accounts are not even yours!
What then could have gone wrong? Here's what has happened. Despite your best efforts to maintain good credit behaviour, by making loan and credit card repayments on time, you have missed one crucial aspect of good credit decorum, which is, keeping a periodic check over your credit report. You may not even have availed the facility of getting one free credit report annually from CIBIL.
As a result, errors may have entered your credit records. It may be simple case of mistaken identity where the details of a customer who is possibly your namesake and a customer of the same bank that you have availed credit from, may have entered your records for a data entry mistake on the bank's part. However, it may not always be that simple. Your nightmare could worsen, if it is a case of stolen identity, where an impostor who has somehow gotten access to your financial details has availed credit in your name and has defaulted on the same. While he has gone scot free you have to bear the burden of being a loan defaulter.
In both cases, your first course of action must be to raise a CIBIL dispute. You can go to the website of the credit bureau and follow the steps mentioned on the site to do the same. While CIBIL, on its part will commence the dispute resolution process, make sure that you contact the concerned lender with the problem at hand. If it’s a simple case of a mistaken identity, the resolution process may be completed within a few days to a week. On the other hand, if it is a more complicated issue such as a stolen identity, you may need to make a few visits to the concerned lender. You will need to trace the culprit and cancel the bogus loan or credit card accounts that have been issued in your name. You may have to take the trouble of sending out letters to all concerned parties (the bank, the collection agencies and the credit bureau) to prove that you are a victim of identity theft.
Once the lender is convinced that you are indeed a victim of fraud, it will send your updated records to the credit bureau. The credit bureau will then rectify your credit report accordingly and your CIBIL score will then reflect your own credit behaviour. However, the dispute resolution process can be a lengthy and frustrating one, during which you need to put your borrowing plans on hold. Once the bank has cleared your name, it is a good idea to put all the documents in order and send a letter to CIBIL along with them to prove your position.
Once, CIBIL rectifies your records from its end, it is a good idea to access your CIBIL report once again after a month or so to ensure that things are indeed in order. You can however prevent mishaps such as these by keeping a periodic watch on your credit records. It is a prudent practice to check your credit report at least twice annually. With CIBIL offering the facility of accessing one free credit report in a year it is become easier for borrowers to keep a check on their financial health and prevent errors from entering their records.