Have you ever been tempted to default on a loan from your bank? Then, approach a different bank and avail another loan. How can you be caught? Trust me....You will not be able to get this loan. You may lay the blame on a 5 letter word, CIBIL.
So what is CIBIL? Credit Information Bureau India Limited popularly known as CIBIL, was founded in August 2000. CIBIL was started to help banks detect customers who try to avail loans/credit cards and might default or fall behind in their payments by checking their past credit history.
If you avail a loan or a credit card from a bank, a monthly report of your repayments is sent to CIBIL. CIBIL uses this information to create a credit information report called CIR. Based on your CIR you are assigned a score called CIBIL score. If you have a good CIBIL score, your loans are easily sanctioned.
You have now understood the importance of your CIR. But...What if there is a mistake in your credit information report? This fact should shock you. Nearly 1 in 4 credit reports have errors or mistakes. If there is a mistake in your cibil report you better correct it. So how to correct your CIBIL report?
SEE ALSO: How to get your online CIBIL report.
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Your credit and personal information is submitted by banks and financial institutions to CIBIL. Your personal information like name, address, date of birth, PAN and so on is submitted by banks to CIBIL. You need to provide accurate information to your bank when you apply for a loan. If there are any changes in your personal data, you better inform the bank.
What if some of the personal details or any of the accounts in your CIR, do not belong to you? You must always check your CIR and your CIBIL score, before you apply for a loan. If you notice any accuracies in your CIR, you must initiate and complete the Dispute Resolution Process.
SEE ALSO: 4 common myths on CIBIL score.
What happens if you detect an error in your CIBIL report? You will first have to download the dispute form from CIBIL and then notify CIBIL. You will also have to write to your bank or lender. Most of the time your issue is resolved. But, sometimes a resolution might not be reached. You then go to the next step.
You write a letter to the grievance cell of the bank. The bank will look into this matter and address your concerns. If the bank does not address your concerns then, go to the next step.
What if the grievance cell is not able to resolve your issue? You will have to write to the banking ombudsman. The Government of India has created the banking ombudsman to look into and enable the resolution of your complaints, vis-a-vis certain services offered by banks. The banking ombudsman will take up your issue with the bank and resolve it within 30 days of you, filing the complaint.
What if the banking ombudsman cannot resolve your issue? You will have to approach the consumer court to get your matter resolved. Remember, the ruling of the consumer court will precede over the decisions taken by the banking ombudsman or even your bank. The consumer court literally has the last say in this matter.
SEE ALSO: Benefits of a good CIBIL score.
So go ahead and correct the mistakes in your cibil report. Don't postpone this very important job. Your loan application could get rejected and you might lose an opportunity to avail a home loan - a very important loan.
Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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