Credit usage is universal in the world that we live in today. However, to access credit in a timely manner at competitive rates of interest, you need to have a satisfactory CIBIL score (750 and above out of 900) and a CIBIL report that is free of errors. However sometimes due to the lack of knowledge or negligence to check one’s report for errors, your credit report may not be representing the credit behaviour in the manner it should. Here are three ways in which your credit report could be wrong about you, without you even knowing about it.
The first and foremost reason why the credit score can come down is inaccurate information about you in your credit report. For instance, your basic details such as your name, address, PAN card number maybe wrong. Secondly, there may be loan accounts against your name that you do not recognise, or a loan or credit card account that you may have closed may still be showing up against your name in the report.
It is therefore of utmost importance to check the credit report periodically for errors. It is recommended that you check your CIBIL report at least twice annually to ensure that there are no errors or discrepancies that creep into your report. CIBIL has also introduced the facility of borrowers can use to check one free credit score annually. This can prove to be of great advantage to you when you want to check your credit health.
Your repayment history has the largest bearing on your CIBIL score. If you have built a regular habit of making late repayments on the lines of credit you have accessed it will show up on your credit report. This in turn will prove to be detrimental to your CIBIL score. The first rule of credit usage is therefore to make regular repayments. That is half your job done. If you skip or make irregular repayments, the credit report will reflect the same. This will mar your prospects of accessing credit when you need it. The only way to salvage the situation is to make regular repayments and rectify your CIBIL report. However, in the meanwhile, if you find yourself in a situation when you are in urgent need of credit, you may consider a personal loan with low CIBIL score. In fact, opting for such a personal loan and making timely repayments on the same may help you fix your credit records and improve CIBIL score
Think about this. You are a conscientious borrower who is servicing your credit on time and are doing all other things right like keeping credit utilisation ratio under check, maintaining a good balance between secured and unsecured credit and opting for only that much credit that you think you can repay. Assured of the fact that there is nothing that could go wrong with the credit record you apply for a personal loan because of some financial emergency and fall off the sky when you are informed that your application has been denied because a poor CIBIL score. You are in such a case left with no option but to apply for a personal loan with low CIBIL score.
To your horror you pull out your report to find that indeed you have a poor CIBIL score because your identity has been stolen. The thief may be leveraging the advantages of your good credit records to access loans and credit cards that he is not servicing or has simply absconded after having accessed credit. Most innocent borrowers do not even know that their credit identity has been stolen or that that are victims of fraud till they make an application for fresh credit. An identity theft can be really damaging and make take a long to time to rectify after going through the procedure of raising a CIBIL dispute and getting in touch with the concerned lenders.
This kind of a disaster can be averted easily if you are conscientious user of credit who makes it a point to check his CIBIL score and CIBIL report regularly. You can put the CIBIL facility of accessing one free CIBIL report in a year to good use and check your report for errors periodically. Any alarming transaction can therefore be reported to CIBIL right away and rectified easily.
Most people find themselves in situations as mentioned above when they do not check their CIBIL score and CIBIL report regularly. Ignorance may feel like bliss, but remaining ignorant about your credit behaviour can prove to be a costly mistake!