How to Rectify Mistakes in Your Credit Report

A credit report is a crucial document that reflects your credit history and financial behavior. It is maintained by credit bureaus such as the Credit Information Bureau (India) Limited (CIBIL), and is used by lenders to ascertain your creditworthiness. However, errors can occur in these reports, which can negatively impact your credit score and your ability to secure loans. Therefore, it’s essential to regularly review your credit report and rectify any mistakes promptly. Here’s a comprehensive guide on how to do so.

Understanding Your Credit Report

Your credit report consists of five sections – personal information, contact information, employment information, account information, and enquiry information. It includes details about your credit accounts, payment history, and outstanding debts. A three-digit credit score, ranging from 300 to 900, is also provided, with a score of 700 and above generally preferred by banks for approving loans.

Identifying Mistakes in Your Credit Report

Errors in your credit report can range from incorrect personal details to inaccuracies in account information. Common mistakes include incorrect personal information, accounts that don’t belong to you, accounts with inaccurate balances or payment statuses, and fraudulent activity. Days Past Dues (DPD), which refers to how many days have passed since an account’s due payment was supposed to have been made in a particular month, should ideally show “000” or “XXX”. Anything else indicates missed payments.

Filing a Dispute

If you spot errors on your credit report, you must dispute them with the credit bureau that provided the report. Customers need to fill out an online dispute form available at the official CIBIL website. They need to have a control number, a nine-digit number found on the top right of the credit information report (CIR), which is created once a CIR is generated.

Verification and Resolution

After the submission of the online dispute form, CIBIL will verify all the details with the concerned banks. All disputes are sent to a credit institution, which ascertains if the dispute is legitimate. The changes have to be authenticated by the concerned credit institution, following which, the credit report can be updated. CIBIL takes a total of 30 days to resolve any dispute depending on the time taken by the credit institution to revert to it with the relevant information.

Re-verification

If customers are not satisfied with the result of the first dispute request, they can initiate a second time. CIBIL will then re-verify details with the credit institution. Customers can also write directly to Credit Information Bureau (India) Ltd, Hoechst House, 6th Floor, 193, Backbay Reclamation, Nariman Point, Mumbai 400 021.

The Importance of Rectifying Mistakes in Your Credit Report

Errors in your credit report can have serious consequences. They can lower your credit score, making it more difficult for you to obtain loans or credit cards. In some cases, errors can even lead to you being denied credit altogether. Therefore, it’s crucial to rectify any mistakes as soon as possible.

The Role of Credit Institutions

Credit institutions play a vital role in the dispute resolution process. They are responsible for verifying the legitimacy of disputes and authenticating any changes to the credit report. It’s important to note that CIBIL itself is not authorized to make changes to the Credit Information Report (CIR). All changes must be authenticated by the concerned credit institution.

The Timeframe for Resolution

The timeframe for resolving disputes can vary. However, CIBIL typically takes a total of 30 days to resolve any dispute, depending on the time taken by the credit institution to provide the relevant information. Once the dispute is resolved, the customer is updated, and the credit report is updated accordingly.

The Need for Regular Checks

Regularly checking your credit report is an essential part of maintaining financial health. It allows you to spot any errors early and take prompt action to rectify them. This not only helps to ensure that your credit score accurately reflects your credit history but also protects you from potential issues such as identity theft.

Rectifying mistakes in your credit report is a crucial task that requires careful attention and prompt action. By understanding your credit report, identifying errors, filing disputes, and following up on resolutions, you can ensure that your credit report accurately reflects your financial behavior. This, in turn, can help you maintain a healthy credit score, making it easier for you to secure loans and manage your finances effectively. Remember, a good credit score is a key to financial freedom. So, keep a regular check on your credit report and stay financially healthy.

Frequently Asked Questions

What is a credit report? 

A credit report is a document that contains your credit history, including payments related to loans and credit cards. It is maintained by credit bureaus such as the Credit Information Bureau (India) Limited (CIBIL).

Why is it important to rectify errors in my credit report?

Errors in your credit report can lower your credit score, making it more difficult for you to obtain loans or credit cards. In some cases, errors can even lead to you being denied credit altogether. Therefore, it’s crucial to rectify any mistakes as soon as possible.

How can I identify errors in my credit report? 

Common mistakes include incorrect personal information, accounts that don’t belong to you, accounts with inaccurate balances or payment statuses, and fraudulent activity. Days Past Dues (DPD), which refers to how many days have passed since an account’s due payment was supposed to have been made in a particular month, should ideally show “000” or “XXX”. Anything else indicates missed payments.

How can I dispute errors in my credit report?

You must dispute them with the credit bureau that provided the report. Customers need to fill out an online dispute form available at the official CIBIL website. They need to have a control number, a nine-digit number found on the top right of the credit information report (CIR), which is created once a CIR is generated.

How long does it take to resolve a dispute?

CIBIL typically takes a total of 30 days to resolve any dispute, depending on the time taken by the credit institution to provide the relevant information. Once the dispute is resolved, the customer is updated, and the credit report is updated accordingly.

How often should I check my credit report?

The Consumer Financial Protection Bureau (CFPB) recommends checking your credit reports at least once a year. However, credit expert John Ulzheimer suggests a cadence of once a month. You should check more often if you plan to finance a big purchase in the next few months or if you know you are at increased risk of fraud.

What should I do if the dispute is not resolved to my satisfaction?

If customers are not satisfied with the result of the first dispute request, they can initiate a second time. CIBIL will then re-verify details with the credit institution. Customers can also write directly to Credit Information Bureau (India) Ltd, Hoechst House, 6th Floor, 193, Backbay Reclamation, Nariman Point, Mumbai 400 021.