7 common credit report errors that you must watch out for

While evaluating a personal loan or any other loan application, the financial institution considers a good credit score one of the most important criteria. The decision to approve or reject the loan application will depend on a good credit score and other criteria. Hence, individuals must check their credit score and credit report regularly. At times, the credit score may fall due to error(s) in the credit report. Regular checking of the credit report helps identify errors, if any, and take corrective action to rectify them. In this article, we will look at some common credit report errors you must watch out for.

Loan/credit card balance is incorrect

Check the loan and credit card balances reflecting as of the last reported date. Are the balances up to date? If there is any discrepancy, check whether you made the last payment before or after the last updated date. If you have paid before the last updated date, follow up with the Credit Information Company (CIC) like CRIF High Mark or the financial institution asking them to update the information.

For example, if you have made a credit card payment and it is not reflecting, it will impact your credit utilisation ratio. If the credit utilisation exceeds 30%, it impacts your credit score negatively. Similarly, check if the last EMI payment on your personal loan or any other loan is reflected in the credit report.

If a bank recently increased your credit limit on a credit card, check whether the updated limit is reflecting in the credit report. An increase in the credit limit with the same amount of monthly card usage will lower your credit utilisation ratio. A lower ratio will contribute towards improving your credit score. Similarly, check whether the outstanding balance on your personal loan and other loans is reflecting correctly. If the outstanding loan amount is higher than the actual amount, it will impact your ability to take additional loan(s), when required.

Credit card/loan not taken by you is showing up

Is there any loan or credit card reflecting in the credit report that doesn’t belong to you or you are unaware of or didn’t apply for it? It may be appearing due to incorrect reporting by the bank or an error at the CIC’s end. In such a case, report it immediately to the CIC or the respective financial institution and get it removed from your credit report.

Such an entry of a credit card/loan not taken by you can also be a case of identity theft and fraud. Fraudsters may have opened a loan or credit card account in your name by stealing your identity details or documents. If that is the case, any default by the fraudsters can damage your credit score and leave you with paying the loan/credit card outstanding that you never took. You should immediately report any such case to the respective bank and get it removed from your credit report.

Closed credit card is still showing as open

A closed loan means you have paid all the due EMIs and have collected the ‘No Dues’ Certificate from the bank. A closed credit card means you requested the bank to close it, and it has acknowledged the same. Does your credit report reflect any such loan or credit card account you requested the bank to close as still open? If yes, you must immediately report the loan or credit card account to the bank and ask it to update the data with the CIC.

If a closed credit card still reflects as open in the credit report, it will eat into the overall credit limit you can avail. For example, if a closed credit card is reflecting as open, and you are near your overall credit limit that you can avail of, it will make it difficult for you to get any new credit cards.

Inspite of timely payment, the account is being shown as delinquent

In the case of a loan, a delinquent account means the payment has not been made by the due date. Similarly, in the case of a credit card, a delinquent account means the minimum amount due (MAD) has not been made by the due date.

In your credit report, do you see any loan or credit card account where you have made the payment due, but still appearing as delinquent? If such a thing happens, it will hurt your credit score badly. You must take it up immediately with the CIC and bank and ask them to rectify the error. The error rectification will also reinstate your credit score to where it was before the erroneous data.

Personal information-related errors

The personal information errors in a credit report can be related to your name, address, contact details, PAN, etc. Is your name misspelt, or middle name is incorrect, or only name initials are reflecting? Have you recently changed your address, but the earlier address is still reflecting in the credit report? Have your contact details, like phone number, email address, etc., changed or not reflecting correctly in the credit report?

You can take up these corrections with the respective bank and ask it to update the data with the CIC. You may need to submit the supporting documents to the bank to make the corrections.

Incorrect credit inquiries

At the bottom of the CIBIL report, you will see the enquiry details like the bank that made the enquiry, enquiry date, and enquiry purpose. Does your credit report reflect any enquiry for a loan or credit card you did not apply for? In such a case, you can take up the matter with the respective bank that made the inquiry. You must ask the bank to investigate the matter and remove the enquiry from your credit report.

Duplicate entries

Does your credit report reflect any loan or credit card twice? For example, suppose a credit card from a particular bank reflects twice. The duplicate entry will eat into your overall credit limit. It will make it difficult for you to get a new loan or credit card.

In such a scenario, you must contact the respective bank or CIC and ask them to remove the duplicate entry from your credit report.

Credit report errors can be rectified easily

Most of the time you will see that your credit report data will be up to date. The errors in the credit report will be far and few. However, once in a while, an error may creep in. You need not panic about it. If you spot any error, you must contact the respective bank and/or CIC and ask them to take corrective action. When you submit supporting documents, the error will be removed and your credit report will be up to date once again.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.