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6 Mistakes People Make When Disputing Errors on Their Credit Reports

  Fri, Aug 04, 2017     written by : CSF-Team
Credit Reports

There may be an instance when you may seek your credit report to evaluate your credit health or when you need to apply for a loan and may be surprised to find an error on it. Errors can be of various types, some may impact the score calculation while some may not; some may be due to an oversight at the level of the credit bureau while others may be due to wrong information provided by the lender.

Whatever be the case it is important that the error is brought to the notice of the rating agency and is rectified at the earliest. There is a laid down procedure that needs to be followed; here we list a few common mistakes that must be avoided when disputing errors.

1. Not Understanding Your Report Well Enough

Before raising a dispute it is important to be clear about the information that is included in the report and what it means. There may be times when you may feel that something is inaccurately reported while it not may be so and there may be times when you may overlook a glaring error because you don’t know that the information given in the credit report is wrong. An example can help us understand this better.

Priya paid all her auto loan EMIs but failed to get a NOC from the lender and thus it appeared as an open loan in her CIR. She thought this was due to an oversight of the agency or the lender not knowing that she needs to get a NOC before the loan can actually be shown as closed in the CIR.

2. Raising a Dispute Just Before Applying for a Loan

There is process to be followed for getting a dispute resolved and it may take some time. If you check your CIR just before applying for a loan, spot an error and expect it to be taken care of immediately then it may pose a problem. You may miss the opportunity for which you are applying for a loan or may be forced to approach a lender who offers a loan for low CIBIL score which usually are at very steep rates.

3. Not Being Clear About the Actual Problem

The applicant needs to be absolutely clear about the actual aspect that he/she is disputing. There should be clarity about what you are disputing and why you are disputing it. Simply saying that the information is incorrect is not sufficient. If one does it online then there are various options to choose from so you can choose from the given options the nature of your dispute.

4. Not Having Supporting Documentation

This can be said to be a follow up of the above aspect. If you raise a dispute and the lender or the credit card agency does not agree with your view you should have supporting documents to validate your stand. If you have paid all the EMIs and have taken a NOC but the loan still shows as an open loan in the CIR then you should have the NOC as evidence to support your claim.

5. Sending the Query Directly to the Lender

Credit Bureaus report the information that is given to them by the lenders. Thus one may think it makes sense to directly approach the source of information but it may not be the best course of action. In today’s digitized and centralized banking system you may not know which exact branch to approach. If there is wrong loan reported in your statement and you approach the bank, since you are not the bank’s customer they may not even entertain you and lastly credit bureaus have a clearly laid out system for dispute reporting and resolution which makes fixing the accountability easier.

6. Checking the Report of Only One Bureau

There are four bureaus in India; the scoring pattern may vary slightly but the basics remain same. Thus if the score is good in one it is likely to be similar in the others too. However if there is mistake then it may be there in only one or if it is there at the level of the lender then it may be there in all. One does not know which report might be accessed by the lender (and otherwise too) thus make sure to check reports from all the bureaus especially if you spot an error in one of them.

Staying credit healthy is important and keeping all your CIRs free from any errors is also paramount. If you spot an error in your report steer clear of the above mistakes.