Badly need a loan? Well, you are not alone. Many of our citizens avail home loans, car loans, personal loans and two wheeler loans. Before you march to the bank to avail a home loan or a car loan you badly need, do apply and take a look at your credit report. Not doing so could mean your loan gets rejected.
Why is your credit report so important? Let's say you avail a car loan from a bank and don't repay. A few years later you avail a personal loan from another bank with no intention of repaying. This bank will suffer a loss and banks don't like suffering losses.
This is why the Credit Information Bureau (India) Limited popularly known as CIBIL, was started in August 2000. This was India's first credit information Company. We also have credit information Companies like Equifax and Experian. Every time you avail loans, banks and financial institutions send your information (borrowing info) to CIBIL.
CIBIL collects all the information provided by banks and financial institutions and creates your credit report. Based on your borrowing history and repayment record, you are assigned a CIBIL score between 300 to 900.
With CIBIL, banks have a detailed picture of your credit worthiness (based on current and past borrowing/repayment). Banks check your CIBIL score to assess your capability of repaying loans, before sanctioning your loan. Planning to borrow and default...Forget about it.
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Now, imagine if there is a mistake in your credit report for no fault of yours? Your loan would never get sanctioned. Don't you think you must check your credit report before applying for a loan?
Let's say the bank staff have made a typographical error when entering your personal details like name, date of birth and PAN details. Bank staff manually enter these details and they could make mistakes. Unfortunately, you suffer for this.
What if banks give addresses that you have never used as a mailing address?
If you go through your credit report, you may find a loan or a credit card you never availed. Put this down to account related errors. Then you would have closed some loans, but they are not listed as closed by the bank.
This could mean a rejected loan. You could also see a late payment that's more than 7 years old, reflecting in your credit report. CIBIL generally holds your record (credit history) for 7 years.
Derogatory marks are negative marks (records) on your credit report. These derogatory marks stay for 7 years on your credit report and loans will not be sanctioned. Your credit report shows a loan balance, higher than the actual amount it must show.
Your part payments and fully paid loan payments, do not reflect in your credit report. This could be because of a time lag between data collection, submission and the updating of the account status. You get a bad credit score.
SEE ALSO: 4 Common Myths On Cibil Score
You can correct errors in name, address, DOB, PAN and also incorrect information on loan balances, loan payments, outstanding and overdue amounts.
1. Visit the CIBIL website and fill the online dispute form to correct errors in your credit report. You also need to mention the control number (you get this from the credit report). Provide any other details as requested.
2. After you submit the online form, your query gets forwarded to the concerned credit institution where it is verified. CIBIL cannot make changes to your credit report on its own. The bank/FI from where you availed the loan authenticates your request (states if your grievance is valid or not).
3. If your dispute is valid, the bank sends the rectified information to CIBIL and it gets published. You are informed of the change.
CIBIL takes about 30 days to resolve your dispute, depending on the time the bank takes, to get back with the necessary information. You don't have to pay any money to CIBIL to resolve your dispute.
What if your personal details have been misused to make unauthorized financial transactions? You must immediately raise a complaint with the bank. Also submit relevant proof to the bank. The bank will resolve the issue and report updated credit data to CIBIL. Make sure to apply for your credit report to check if the necessary changes have been made. 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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