An excellent Credit Score will get your loan application approved in a jiffy. But what should you do if you find errors in your credit report? We’ll tell you all about it here.
You’ve done everything you needed to fix your previous Credit Score and are now confident of getting your loan application approved. To be doubly sure, you pull up your credit report to check if there are any possible red flags that might hamper your chances of approval.
But, as luck would have it, you find errors in your report. Before you panic, we’ve got a step-by-step guide on how you can get those errors fixed.
Additional Reading: How Does Bankruptcy Affect Your Credit Score?
By the way, if you didn’t know this already, you can get your credit report from any of the credit information bureaus such as the Credit Information Bureau of India Limited (CIBIL), Equifax and Experian. In fact, on BankBazaar, you can get your credit report for free when you check your Credit Score on our website and mobile app (which again is free).
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The report, which will detail your entire financial history to date, will also be supported by an analysis and recommendations by our in-house financial experts to maintain and improve your Credit Score.
When you submit an application for a loan to a bank, the bank pulls up your credit report to check your standing as a borrower before disbursing a loan. However, an error on your credit report such as your name spelt incorrectly or an incorrect PAN number can delay your loan-approval process or may even lead to a rejection of your loan application. Here’s a step-by-step guide on what you can do in such cases:
Note down the possible errors:
Start by first making a note of the inaccuracies in your report. Common credit report errors can include:
- A late payment that’s more than seven years old.
- Having a Credit Card or loan account listed that doesn’t belong to you.
- An account that was closed by you but isn’t listed as closed by the provider.
- Accounts that may have been reported twice, giving off the impression that you have opened more lines of debt or credit than you actually have.
Derogatory mark errors:
Derogatory marks are negative records on your credit report that can damage your credit. These marks generally stay on your credit report for seven years or more. They will likely hurt your ability to qualify for credit or obtain desirable rates. Examples of derogatory mark errors are listed below:
- Incorrect loan balance: Your credit report may show a loan balance of higher amount even though you’ve made part payments or paid your loan fully. This may happen if your lender hasn’t informed the credit bureau about your payments.
- An account that was discharged in bankruptcy is still reflecting as active with a balance.
Personal information errors:
- Your name is spelt incorrectly, the PAN card number mentioned is not yours or any personal, employment or account-related information is not correct.
- Addresses you’ve never lived at are being used as your mailing address.
- Your former spouse’s debts are still mentioned in your report.
How are credit reports created?
Your lender provides information to the bureau which collates everything into a credit report. The credit bureau doesn’t collect information on its own. Rather your lender/s, bank or NBFC, sends all necessary data to the credit bureaus. And this usually takes up to 45 days. So, any payment made by you against any loan will not be reflected instantly. So, if you’ve made a payment against your loan and asked for your credit report before 45 days, chances are that it will not reflect in your report.
The process of dispute resolution:
Credit record-keeping agencies can’t make changes on your credit report on their own. Follow the below-mentioned steps to dispute an error on your credit report:
- Fill the dispute form and submit it online. You will have to provide information such as your name, address, date of birth and control number (it is your credit report identifying number) in the form.
- Your credit bureau will then send your dispute details to the bank or NBFC.
- Your bank or NBFC will revert stating if the dispute is valid or not.
- In case of a valid dispute, it will inform the credit bureau and the relevant changes will be incorporated.
Additional Reading: How To Understand Your Credit Report
When will your dispute be resolved?
The credit bureau or the lender generally takes 30 to 45 days to look into your dispute post 30 to 45 days of receiving notification of the dispute. Post this, they’ll notify you of the result.
Summing up, we’d suggest that you always check your credit report before applying for a loan. Any error or inaccuracy in your credit report can sink your Credit Score and lower your chances of getting approved for a loan. A low Credit Score can impact your credit standing and financial future. So, if you come across something that seems amiss on your report, take action immediately.
Additional Reading: Ways In Which Your Credit Score Impacts Your Life
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