Contrary to popular belief, credit reports are also not safe from errors. These errors could be caused by a variety of reasons; one of the most frequent reasons being miscommunication between banks and credit bureaus. Regardless of how the error was caused, you need to get it fixed!
Why is it important to correct errors in your credit report?
It is important to correct errors in your credit report because your credit report is crucial to your financial health. Every financial institution checks your credit report when looking at a credit card or loan application. And an error can affect your credit report severely.
What are some common credit report errors?
The errors on credit report can be of various types. However, here are some types of common errors in your credit report that you need to watch out for:
Identity related errors, such as:
- Incorrect identity information such as a mistake in the spelling of the name, mistake in PAN number or such.
- Mixing of identity information with someone with the same or similar name.
Account related errors, such as:
- A closed account still showing as open.
- A new account not showing at all.
- Accounts that are incorrectly reported as defaulted.
- Incorrect date of EMI payment, or incorrect showing of late payment.
- Same credit account listed more than once.
- Someone’s else’s credit account listed, that is not even yours.
- Accounts that are more than 7 years and are still showing in your recent credit history.
Balance related errors, such as:
- Account showing an incorrect balance.
- Account showing an incorrect credit limit.
However, keep in mind- it takes at least 2 months for information to be updated in your credit report. So, an account which is not older than 2 months might not reflect in your report. Also, an account might reflect incorrect balance because it has not been updated yet.
How to correct credit report errors?
It is extremely important that you get any errors in your credit report corrected immediately. For doing so, you need to take the following steps:
Step 1: Contact your credit bureau
For any errors on your credit report, you need to ensure that credit bureaus have got it right. You need to contact them, and explain to them what the error is.
Most credit bureaus allow you to do this online, via their websites. However, it is highly recommended that you maintain a paper trail (through emails or letters) for all of this, in case your dispute isn’t resolved. Also, include copies of any documents that support your claim (if you have any) and ask them to remove the error. You can also include a copy of your report with the error highlighted, just to make the point clear.
(Note: When you include a copy of your report, ensure that you blur or hide all other information that is not related to the concern you are raising. This is vital to maintaining your privacy and security.)
Step 2: Verify information with the sources, if needed
There is a chance that the credit bureau will tell you that the information was reported so by the source. In this case, you need to contact the source of the information, i.e. your bank or NBFC. It is possible that they might have reported some information incorrectly. So you need to check with them and verify that the information they have is correct. If the information they have is incorrect, you need to make a request to get it changed.
Step 3: Ensure that each error is resolved
You need to ensure that each error is resolved. For this, you need to keep in mind the source you are raising it to.
When raising your concerns to the credit bureau: If your report has more than one error, you can raise all of them in one go. The credit bureau would be able to resolve your concerns faster.
When raising your concerns to the bank: If your report has more than one error, you need to ensure that you report all of them individually. Chances are that you will end up doing this anyway because of being connected to multiple banks and NBFCs.
Remember!
Your credit report is extremely important. You should check your free credit report online at least once every 2 to 3 months, to keep an eye on it. You are in charge of your financial health, which is why it is important that you watch out for errors that might cause any harm.
