Tia was in for a rude shock when all four of her credit card applications were rejected. She was hoping to be approved for atleast a couple of them, which her pals said were "most happening" cards. She was told it was because of her CIBIL score. For poor Tia the series of shocks continued when her muddled credit report arrived. She resolved to set it straight once and for all.
One cannot undermine the role that credit scores play in credit evaluations. Sometimes, we ignore our reports sheerly because we are not looking for a loan or a credit card and brush it off thinking, "who cares?" Honestly, you should care. Care for your report and score because they will help you sail in choppy waters. When you need a loan, your score will be a primary concern but alas, you may not have enough time to improve credit score it then.
Most common notion is that as long as you pay your bills on time, your score is taken care of. Often people are sure that by not applying for credit and by paying for whatever they owe, they are contributing to a higher score. But no, a score is made up of several factors. Each and every factor must be looked after. Even if you are looking after every aspect of your score, there could be inaccuracies in your report that are affecting your score. It can be quite disheartening to have a low score inspite of doing everything right.
As per a survey done by Credit Sudhaar in 2013, under Errors in Bureau Reports, it was found that more than 26% of CIBIL reports (sample population) had an error in them. Of these, close to 76% reports had a major error like incorrect account status, account not reported and unidentified accounts. Other minor errors were spelling mistakes, wrong DOB, incorrect address or email id, wrong gender and income details etc.
It was further noticed that most accounts had a misreported status. For example, those that were fully paid were showing as "outstanding". A fully paid and closed account re-establishes the fact that the borrower has a good intent to repay the lender and also has the capacity to fulfil the promise. However, an open line of credit that is continuously accruing interest can build a higher false outstanding figure.
About 6% of such reports did not show accounts that were open and being serviced properly. You are functioning under the impression that your score is improving every time you are making a spot on payment. But if the activity is not reported to the bureau, it will not help your score rise further. And all your efforts will actually be going down the drain.
Another important error noted was the mismatch in details. Either the name on the account and the report did not match or other details. These could clearly indicate a case of identity theft where a con person impersonates himself or herself to represent you and take loans on your behalf with malice in intent. This can destroy your good credit and hurt your score and compel you to opt for personal loan for low cibil score if need for funds arise.
Minor errors like spelling mistakes may not directly hurt your score but having a clean & clear report speaks volumes about you as a person. With it you are perceived to be a meticulous and conscious person and the lender expects you to carry forward these traits as a borrower.
Also, spelling mistakes in report can lead to mix up in account information. For example, in North India, there are quite a few different ways in which "Agarwal" is spelt. If your name is "Manish Aggarwal" but it reads as "Manish Agarwal" on your report, don't overlook it as a minor error because your good accounts could get mixed up with poor accounts of some "Manish Agarwal".
The procedure to have your report corrected is pretty simple and user friendly. If you have noticed some errors on your report, you must bring it to the notice of the bureau. You can log on to CIBIL's website to get a correction done in CIBIL report. You must raise a CIBIL dispute to have the bad credit fix. After that the bureau will get in touch with the credit institution in question that sent the information to the bureau. Once the lender accepts fault and sends correct information, your report is updated instantly. Orelse, you will be asked to clarify with the credit institution itself. This entire process is completed within 30 days for every ticket raised.
Based on Credit Sudhaar's Credit Health Survey, we can say that at least 1 out of 4 CIBIL reports have an error. When the margin of error is that large, it puts a greater responsibility on individuals to self-review their credit reports once atleast every six months to ensure that their reports are error free and reflect a true image of them as a borrower.
You can either order a copy of your CIBIL report online through their official website upon a payment of Rs. 550/- per copy or order it for Free at freescoreindia.com and get an instant analysis with it. An error free report today means hassle free borrowing tomorrow. Get your copy today!