How to settle your credit scores

BL 28 july 14

Correct them online or by way of a written request with supporting documents

A credit score, whether from CIBIL or Experian, can have quite a say in whether you succeed in your loan or credit card applications, and in the interest rate you may get. But errors can crop up in your credit report due to no fault of yours, wholly messing up your finances.

So if you want to apply for a loan, it’s best to get your first credit score before making the application, just to be sure there are no surprises in store.

Identifying and rectifying any mistake in the score can then be done quickly.

The mistakes made

Two main factors account for credit score mistakes. First, it can be wrong entries at the time of making inputs, such as an extra zero added accidentally to a personal loan of ₹100,000.

And second, credit information companies rely on lending institutions sending data every month.

A delay or neglect in this updating can lead to payments not being credited to you when you apply for the score. Says Harshala Chandorkar, Senior VP, Consumer Relations, CIBIL, if you access your report within 45 days of making a payment, it may not be updated.

It’s a red flag when the date reported (date on which data is submitted by that lender) on your account is older than two months and your payment is not reflected.

A CIBIL TransUnion score, for example, is split into personal details and loan account details.

Both can have mistakes. Personal detail errors can be a mis-spelt name, incorrect date of birth, gender, address or telephone number. Identification details provided, such as PAN, voter ID or passport, could also be wrong. An incorrect PAN can have far-reaching implications, as that is linked to any financial transaction you make.

Loan account mistakes can similarly be disastrous. Your loan status may be wrong — stating overdue when you have made all payments or latest payment not updated.

Loan accounts you closed can be classified as written off or defaulted, especially if the lending institution hasn’t been updating details on time.

This can send credit scores crashing. The same loan details can accidentally show up more than once, raising the total credit, known as duplication errors.

Or your details can be mixed up with someone else’s, leaving you with loans you’ve never taken, or several requests for credit which you haven’t made, called ownership errors. In the most extreme situation, if your details are stolen and misused, that can reflect in your credit score details.

Correcting the mistakes

If you find mistakes in your credit score, report it immediately to the credit information company. It cannot make corrections on its own; it takes it up with the institution in question and, once confirmed, rectifications are done.

Reporting CIBIL score mistakes can be done online through their Dispute Resolution. Fill up the form available through their website www.cibil.com.

Give your personal details as well as a detailed explanation of the mistake.

If you are uncomfortable working online, send a written request to their Mumbai address. Always mention your CIBIL control number, available in the top right-hand corner of your report.

Rectifying Experian score mistakes can similarly be done by sending written requests. They require supporting documents too, such as identity and address proof, and sending them to their Mumbai office.

Barring complications, disputes are settled within a month’s time. Personal details may be quickly settled since it involves looking through identification proofs.

Loan account mistakes can take some time as a result of back and forth communication between the lending institution and the credit information company.

Recourse

Should the mistake you point out be disputed by the institution, the credit information company will let you know.

Theoretically, you can re-apply for correction, though it is rather pointless. Take it up with the bank. Protect your own interests. Chandorkar suggests maintaining proofs, such as loan closure letter, payment confirmation letters or emails, especially if you’ve settled previously written off or overdue accounts.

She also emphasises the need to keep your lender up to date with your personal details so that necessary changes and communication can be made.

Credit information companies too fall under the purview of the Reserve Bank. You can approach the banking ombudsman if you are still dissatisfied.

If all else fails, the consumer court is your last resort