No one is perfect. Credit bureaus and their staff is no exception to this universal rule. Credit bureaus receive customer data from various lenders which is then fed into individual reports. They often mix up data and botch up several scores. It is no surprise that a bad score acts as a bottleneck to credit. It may not be your fault and yet you may have a poor score.
Your report could be muddled with inaccuracies and only if you choose to review your report you can spot them and have them corrected. Or else, you may have to suffer just like a few of our patrons, who had to settle for personal loan for low CIBIL score as their reports displayed a poor score.
Here are their stories. We are hoping you would pick some useful pointers from their examples.
Rahul Agrawal, a law abiding citizen of the national capital, was hard-working and very careful with his money. He worked with clockwork precision, meticulously planning his activities pre-hand. When his loan application was rejected by two of the mainstream banks it left him red-faced. He was shocked to learn that he had a miserable CIBIL score of 570. He approached a NBFC that agreed to lend to him at a higher rate of interest.
Upon reviewing his credit report we found something so minor and yet so relevant. Despite being an impeccable borrower in the past Rahul's score was miserable because of certain accounts showing on his report that were not his. Incidentally, the bureau had mixed up the records of two different names - Rahul Agrawal and Rahul Agarwal. A minor spelling error cost our Mr. Agrawal quite some penny and pain. Once those records were off his report, within a span of 30 days his score hovered over 700.
This is a classic example of an error. As against the previous case, Nita Kulkarni had a low lying score all because her primary lender, Saraswat Co-operative Bank, had not sent any of her details to CIBIL. In the absence of records the bureau had assumed she had no credit history and therefore she did not have a favourable score. Since she didn’t know why her score was so poor, she agreed to settle for a high cost debt.
We helped her contact her lender and seek a clarification on why her records were not being shared with the bureau. Within a couple of months, Nita went from being shy about her credit score to being boastful about her good character as a borrower. However, she regretted not having reviewed her report earlier for she would have saved a huge amount that she paid on her personal loan.
Similar to Nita's case, was Shruti Srivastava's case. Although Shruti's bank did send the records to the bureau but they were either delayed or they missed sending the complete information. When Shruti's daughter was getting married she used her credit card quite often, and the bill was running into lakhs for a few consecutive months. All this while Shruti settled her card payment in full, only to learn later that they were being misreported by the bank, as the staff omitted adding a "zero" in the end, making it appear that she had only repaid a few thousand rupees.
Few consecutive defaults with a huge outstanding card bill made her score nosedive. Shruti was so busy with the arrangement's for her daughter's wedding that she didn't have time to check her score and when her student loan application for her son was declined, she was in doldrums. She quickly picked the next available high interest loan for bad credit to pay her son's fee before the deadline.
When she finally found out the truth it left a bitter taste in her mouth.
Pravinbhai Parekh, didn't have time to think twice when he had to pay for his wife’s treatment. He wasn't prepared for the emergency and didn't know why banks wouldn't co-operate with him. He rushed to the nearest NBFC and picked a personal loan with an interest of 27%. Once his wife was well, he approached us with his concerns.
We sat down with Pravinbhai and went over his report, detail by detail. Soon we discovered that his fully paid car loan and personal loan still showed on his report as "open and unpaid". He also had quite a few credit inquiries in his name that he supposedly did not authorise. That had caused the score to continuously plummet. Following our suggestion he raised a CIBIL dispute and made sure his report now reflected proper information.
Primarily, credit reports carry three types of errors:
1 Error in Details under Personal Information
2 Error under Account Information Section
3 Unauthorised Inquiries
Pay attention to all details, from a minor goof-up to outrageous oversights, have them all corrected. You must review your own report once in six months. Raise a dispute for spurious items and incorrect details. All details don't affect your score yet to avoid an embarrassing fiasco in future you must keep your records up to date.
Make sure your creditor sends reports to the bureau on time. A lag at the lender's part could also cause your score to dip. Debts that you have repaid shouldn't say as "open" or "settled". They should be "Closed" on the report too.
There could be debts that you haven't guaranteed and yet they reflect on your report erroneously. Seek professional guidance if you feel lost at the task of self-reviewing.