Now this is an interesting question to ask. Will a dispute on some trade line on the bureau report cost something? The answer to this is both No and Yes. Confused? Read on to learn as to how a question can have both yes and no as an answer.
First understand the two kinds of disputes that one may encounter on the report. The disputes can be categorized into minor and major groups.
These are the ones that will not impact the credit score. A misspell of name, an error in address or telephone number, wrong email id etc fall into this category.
Error in repayment of a trade line (not updated, wrongly updated etc.) on one end of spectrum to a loan or credit card that you may not have ever taken also reflecting on the bureau record at the other end of spectrum is a major error. This set of errors has potential to negatively impact the credit profile fall into the category of major disputes. Please be aware that even a single such error can result into low CIBIL score and grossly impact your ability to borrow money from banks.
If you look at a literal cost, there may be none. Today, you have the availability to obtain your credit report at no cost every year. If a disputable item is found on the report, then one needs to write to the lending institution and the bureau to have the issue/s resolved.
So, if you follow the process and persist to have the issue resolved, there is no cost involved apart from you deputing some time and energy to follow through to get resolution on the disputes that you have sighted on free credit reports.
Any dispute has the potential to cost you dearly. And a credit dispute will definitely continue to haunt till it is resolved. It can lead to disrupting the financial objectives will not be an understatement.
Access to credit
Since your CIBIL score has a major influence on the underwriting decision and the disputes can severely impact it, you may face challenge in getting approval on required credit lines and loans. Unavailability of funds at the time of need can result in financial losses. Thus a dispute on your CIBIL report can cost you
Process of issue resolution
The process of issue resolution itself can be quite complex. To have the issue resolved one may have to escalate the matters to higher authorities (not just the ombudsman desk of the bank). The lack of understanding on the process and escalation matrix the issue may just not get resolved in the time that you may be looking at to have this resolved.
In some cases litigation may be required. Now this does not come at no cost. We all know that litigation requires both time and money.
Unfavorable terms of credit
Depending upon the overall credit profile, you may still be able to secure a loan but the chances of it coming at unfavorable terms are quite high. A higher rate of interest, a shorter term, need to secure it with a guarantor, lower loan to value of collateral can push the cost of funds that may make it unviable.
The best way would be to consult a professional who can guide you through the process and ensure that the process being pursued is right. Following the right process and escalating the matter to right party and due follow up within the stipulated time laid down by the regulator will help in a speedy resolution. And hiring one would have some cost attached to it.
So it is advisable to hire one since the cost of one would only be a fraction of what it would cost if the dispute remains unresolved.