18-Mar-2017 written by : FSI-Team
"Mistakes are a part of life. But it is the response to the error that counts." says Nikki Giovanni a famous American writer and activist. Quotes such as the above are meant to inspire the human race and encourage them to learn from mistakes and errors in life and treat them as stepping stones to success. But what if an error is not your fault? What do you do in such cases? The reason we bring this up today, is to tell you that if errors and discrepancies creep into your CIBIL report, it can have devastating consequences despite the fact that you had little to do with it.
A good CIBIL score and report are a prerequisite when it comes to applying for any fresh line of credit. You may think you are doing all things right to maintain your CIBIL score like making timely repayments and keeping your credit usage under control. But sometimes, for no fault of yours some errors may find a way into your report as banks and credit bureaus handle a large amount of data every day. Let us point out some common errors and the consequences they may have on your credit profile.
When it comes to the borrowing process, you are identified by a lender with certain documents such as your PAN Card, Aadhar card and other such identity proofs. Sometimes, there may be inaccurate or incomplete information about your personal details that reach CIBIL from the lender concerned.
Consequence- Because of the wrong personal details saved in your CIBIL report, you may be identified as someone else by another prospective lender you have made an application to, thus thwarting your chances of getting the line of credit you need at the time.
Banks must send information about your repayment track record for as long as you are servicing a loan or are accessing your credit card. Sometimes though, banks are not be as prompt in sending details about your repayment records to CIBIL. As a result, there is an error in your CIBIL score calculation that brings down your CIBIL rating.
Consequence- Because of incomplete repayment records being sent to CIBIL you may be listed a defaulter on a loan or a credit card account.
As a conscientious user of credit, you may have worked very hard to close a loan account ahead of its tenure to lighten your debt burden. The lender on its part may have closed your account too, but may fail to update this information with the credit bureau.
Consequence- If the lender is not prompt in sending the update about your closed loan account to CIBIL, CIBIL will still consider the loan account as open and consider you a defaulter on the same.
Each time you make an application for a new credit facility, the lender you have applied to will access your CIBIL score and report as a part of its credit assessment process. Every time a lender does so, it is considered a "hard inquiry". Every hard inquiry brings down your score by a bit. However there have been instances where inquiries were made as a result of fraudulent applications. These are clear cases of identity theft.
Consequence- An identity theft is the worst of all errors and can really have a detrimental impact your CIBIL score. You may thus find yourself in a bind due to no fault of yours. What is worse is that an identity theft means that your credit health is now susceptible to further devastating consequences. The impostor using your credit identity may be making further loan or credit card applications in your name.
As illustrated earlier, there are many kinds of errors that may leave a blot on your CIBIL report and impact your chances of accessing a fresh line of credit when you are in dire need of one. These errors may have crept in without your knowledge.
The first thing to do when you spot an error or a discrepancy in your CIBIL report is to raise a CIBIL dispute. There is a dispute resolution cell in CIBIL through which your complaint goes through and upon verification with the concerned lender it is finally resolved. Depending upon the nature of the dispute you have raised, the dispute resolution process may take between a week to a month.
Your work does not stop at raising a CIBIL dispute. You must also follow up with the concerned lender to ensure that the correct information is resent to CIBIL. Once this is done, wait for at least a month or two to recheck your CIBIL report to find out whether or not the information has been updated.
The easiest way to keep errors from entering your CIBIL report is to carry out a credit check at least bi-annually. By conducting a thorough credit check on your credit report at least twice a year you will be able to spot erroneous entries at once and can raise a timely CIBIL dispute. By doing this you can keep your credit health in order.