25-Oct-2017 written by : FSI-Team
Taking a mortgage and making regular on time payments of the EMI is a good way to boost one's credit score. A good payment history on the loan that shows up on your credit report portrays that you are financially stable and can handle big loans responsibly. You can easily qualify for new loans, when you have a strong proof of a good borrowing history.
But what if you check your CIBIL report and find that your mortgage doesn't show up there. Any credit account that does not show up on the CIBIL report will have no effect on the credit score of an individual. This means that your good track record of on-time payments on this mortgage will not contribute in improving your credit score. If such is the case, one must try to find out the reason for it. In case there is an error one must take steps to get it fixed. After all a mortgage is usually a long-term liability which can help in improving your credit score. A good credit score can help you get other loans at favourable rates. You can also get your current mortgage refinanced at a lower rate if you have an excellent credit rating.
Let's look at some of the most common reasons, why a Mortgage doesn’t appear on the CIBIL report.
The primary reason why a mortgage does not show in the CIBIL report is because it takes upto 60 days for the lender to report new account information to all the credit bureaus. Do not expect the reporting to happen right away. If you took an SBI home loan, it is not uncommon to experience delays of 30 to 90 days. If you check your report too soon, you may not be able to see any updated information. Wait for at least 3 months, or contact your lender to find exactly how much time it will take to complete the paperwork and report the credit information to the bureaus. Do not expect to see a rise in the credit score as soon as you take the loan.
If you have opted for non-traditional financing methods like owner financing, chances are your mortgage will not be listed on the CIBIL report and the payments will not help improve credit score. Many private individual financers do not report loan account information to the bureaus. Neither the borrower nor the bureaus can force them to do so. They either do not know that they can report the info, or they do not find it worth to follow the strict requirements of reporting the mortgage information to the bureaus. So even if you request these small lenders to start reporting, they may not be willing to do so. The cost involved or the strict compliance requirement deters them from doing so.
Some lenders do not report accounts in good standing, but if there is a late or missed payment they report the information. There are many lenders who just report the account information to one of the bureaus instead of three. Check the reporting policies of the lender, so that you are not in for any surprises. It is good to ask all your queries so that there are no disappointments later on.
A simple human or computer mistake can also be the reason of absence of reporting of the mortgage. Typing errors, spelling errors, errors in address are a few reasons the credit bureau may not be able to relate the account to your report. In order to get these errors rectified you need to report it to the bureau and send a request in writing. The bureau will verify the information from the lender. If a mistake had indeed happened, it will rectify it and update the CIBIL report.
A mortgage may not reflect in your CIBIL report if your name is not present on the mortgage documents. Sometimes couple’s apply for the loan in the person’s name who has a good income and a high credit score that satisfies the approval criteria. Even if the other person makes the actual payments, he/she may not see it on the CIBIL report. Simply put, if your name is not on the loan documents it will not be on the report either. Either refinance the loan in both the names or add yourself as a co-borrower to have it on your report.