How to Rectify Mistakes in your Credit Report?

A credit report is one of the most vital documents that your lender will look for during the credit approval process. It contains all the minor details about your borrowing and repayment habits, such as the amount of debt you owe, previous EMI skips, the number of loan applications you have made recently, and much more. The lender will reject your application even if you have a high income but a poor credit report. However, it is possible that the poor credit report is not your fault but rather the result of a technical glitch or a lender's error. Let's look at how you can rectify your credit report.

What Are The Most Common Causes Of A Poor Credit Report?

Here are some of the most common causes of a poor credit score -

• You have missed numerous EMIs on your previous and on-going debts.
• You submitted multiple applications to various lending institutions at the same time.
• You have several credit cards and use more than 30% of the limit each month.
• You have previously defaulted on debt repayment.

 
Also Read: How to Improve Your Credit Score
 

What are the most common mistakes on a credit report? 

There are primarily three types of credit score errors. These include–

• Identity-related mistakes

  Such errors may reveal incorrect PAN detail, mobile number, name, or residential address. There is also a chance that any other person's credit information will be replaced with yours because you share the same name with that person.
   

• Account-related mistakes

  Any new credit you have recently obtained may not be displayed. Sometimes the closure of a loan account may also be missed. Inaccuracy can relate to incorrect EMI information and late payment.
   

• Balance-related mistakes

  It can include an incorrect account balance or errors with your credit card usage rate.
   

• Duplication error

  This error is caused by the dual display of a single loan with a different lender name. For example, if you have a used car loan from Hero FinCorp, such an error may display the same loan with another lender's name as well.
   

• Fraudulent account

  Any error involving an unknown transaction or an anonymous account falls under the purview of fraud. They must be reported as soon as possible to bureaus, as well as the cyber cell or other relevant authorities.

How to Correct a Credit Report?

Correction in a credit report can be initiated by following the crucial steps outlined below. 
 

1. Review your report

Review your credit report card at least every twelve months. Have information on your ongoing debts and previously closed ones while checking the details. Cross-check the outstanding balance, the number of outstanding debts shown on the report, and the KYC information. Make a note of any discrepancies you notice so that you can raise disputes easily.
 
Every year, many credit bureaus provide users with one to two free credit checks. Remember, even if you have premium access to the credit bureau website, you should never check your score every next day. Such actions will place you in the category of a hungry borrower, further deteriorating your credit report.
 

2. Connect with the credit bureau

After determining the errors, visit the respective bureau website through which you have downloaded the report. Log in using your credentials and navigate to the "Raise a Dispute" link. After clicking on that link, your screen will display the online dispute form. Fill it out with all the necessary information, like basic details and the list of errors you wish to rectify. 
 

3. Upload documents

The next step requires you to upload documents proving the legitimacy of the dispute you are raising. For example, if you are submitting a dispute request for an unclosed credit account, you must include the No Objection Certificate (NOC) that you received from your lender after making the last EMI payment.
 
Similarly, if the rectification request is for your name or address, you will be required to submit KYC documents such as your Aadhar card or any other valid identity proof.
 

4. Wait for a response

The credit bureau will then cross-check the information and documents you have provided with what is published on their website. The investigation usually takes 30-45 days, after which the bureau will send you the new report.
 

5. Review the report

Examine the report to see if any changes have been made. And, if they did not make the changes, then look into the reason the bureau gave you. If the changes are still inaccurate, you can contact the concerned bureau via email.
 

6. Recheck your credit report

Once the process is complete, go to the credit bureau's website and download the updated report. However, begin this process after receiving a rectification update from the bureau.


Also Read: Procedure to check credit score by PAN card
 

Conclusion

An erroneous credit report has several negative repercussions. The first is that even after you have closed your loan, you are still unable to obtain approval for future borrowings, such as a personal loan. If you have a credit card, your lender may reduce your total credit limit. Hence, as soon as you notice a mistake on your credit report, you must attempt to correct it.