Any issue on your credit report could be the consequence of a previous error you made. Another reason for an inaccuracy in your credit report could be a mistake on the part of the agency or if you provided the credit bureau with wrong information. Furthermore, any errors on your credit report may reduce your Credit score. As a result, it’s a good idea to go over your credit report and address any errors. If you see an inaccuracy on your credit report, contact your lender right away and file a dispute.
Errors
Credit report errors can arise in a variety of ways, potentially reducing your CIBIL score. It is recommended that you create a CIBIL score login in order to check your credit score and report on a frequent basis. The following are some of the most common errors that may appear on your credit report:
1. Incomplete or incorrect personal or account information
Any typing error in your name, address, or date of birth is a common mistake that may be easily fixed. These minor mistakes, on the other hand, have the ability to lower your CIBIl score.
2. Incorrect Account Tagging
As a consequence of clerical errors or fraudulent identity usage, any account that you do not own may appear on your credit report.
3. Days Overdue
If DPD displays anything other than ‘000’ or ‘XXX,’ your payment may be past due. If you have made the payment and the DPD still indicates an amount more than ‘000, the credit bureau or lender may have made an error. If you make a mistake, all you have to do is fill out an online dispute resolution form. The credit bureau will evaluate the complaint and erase the inaccuracies following proper validation with the original facts. Before sending the information to the credit bureau, it is best to double-check it.
4. Account Closure Mistake
Even if you have paid off your credit card balances, this error may still appear on your credit report. The lender most likely has not notified the credit bureau. Locate the closed account on your credit report and contact the lender to discover if it has been closed and reported to the credit bureau. If the account has not been canceled, provide the necessary details and receive a No Objection Certificate (NOC). It will be deleted from the report whenever the bureau receives updated data.
Misconceptions
There are some common CIBIL score myths that people believe can lower their score. Some of these myths are as follows:
1. I’ve never sought credit.
Banks will have to do a more extensive inquiry to verify your trustworthiness and ability to repay if you have no credit history. As a result, they will take extra precautions when evaluating your loan application. Avoiding credit is favorable if you do not utilize it for any of your financial demands.
2. Calculating the CIBIL Score
If you don’t have a credit history, you may be tempted to apply for credit cards and small loans in order to get one. This is a bad idea since credit institutions may identify your attempt to build credit quickly. As a result, your CIBIL score will decrease when you check it.
3. Excessive Credit Use Is Advantageous
When a credit card’s credit limit is exceeded, the credit utilization ratio rises (the ratio of credit card balance to credit limit). It is preferred if the ratio can be kept as low as possible. If you choose to expand your payment obligations, your credit score may suffer.
4. The credit score of the guarantor will continue to improve.
You may have agreed to act as a guarantor on a loan application for a friend or family member, but this could damage your credit in two ways: if the applicant defaults on the loan or if you are financially required to satisfy the guarantee’s requirements.
5. Getting Rid of Old Accounts
Some of you may be ready to close an old account because credit cards are considered unsecured loans. As a result, your credit score could suffer. Indeed, if you have an older credit card account with a strong payment history, you may be able to expand your borrowing alternatives.These are some of the errors and misconceptions that people have about their CIBIL score. However, there are various methods on how to improve CIBIL score that you can adapt if you have a low CIBIL score.
