Is CIBIL worthy? Faulty Credit Scores Upset Borrowers

As CIBIL knows about the creditworthiness of its customers, likewise customers know about CIBIL’s worthiness. CIBIL’s worthiness can be understood well by people who have been denied loan or credit card because of their low credit score. Credit bureaus like TransUnion CIBIL, previously known as CIBIL (Credit Information Bureau (India) Limited) collates, manages and generates credit score from the data provided by banking and non-banking institutions. Lending institutions like banks and NBFCs consider CIBIL score as the foremost criterion in sanctioning any type of loan. Though sometimes due to some misinformation in the financial data provided to the bureaus customers have to suffer. Credit reports with errors give anxiety to customers, as getting the corrections done in the same requires both time and patience. However, most of the loans get approved on the basis of CIBIL score of the applicant.

Let’s now have a better understanding on TransUnion CIBIL and its worthiness.

Founded in 2000, TransUnion CIBIL is a credit information company that manages consumer’s credit-related information worldwide. CIBIL works closely with 2400 members that include financial institutions, banks, housing finance companies and NBFCs (Non-Banking Financial Companies). TransUnion CIBIL has access to data of over 550 million consumers and commercial borrowers. There are four major credit bureaus that operate in India, such as TransUnion CIBIL, Experian, Equifax and CRIF High Mark. According to TransUnion CIBIL “79% of loans or credit cards are approved for individuals with a CIBIL Score greater than 750”.

Knowing About Faulty Credit Score

Erroneous or faulty credit score is a common occurrence which happens due to mistakes in credit reports. Faulty credit score could lead to low credit score which eventually results in the rejection of your loan application. A regular check of your credit report is mandatory to avoid any type of financial loss. Some of the common mistakes reported by customers are as follows:

• Mistakes where your name is mis-spelled, or the PAN number is not matching yours.
• Incorrect personal, employment or account related information.
• Loan amount mismatch or any other loan under your name which is unknown to you.
• Loan status says written off or settled, whereas you repaid the loan on time.
• Despite all your on-time payments, your day-past-dues section displays delayed payments.

As TransUnion CIBIL collates the information provided to it by the lenders, there is a possibility that your lender has not informed the credit bureau about the repayment that you have made, hence it shows incorrect information. Generally, the information is updated by the credit bureau in 30 days, so if you will check it before that, it may not show in your credit report. However, it should be taken as an error if even after 30 days the information is not reflected on your credit report.

How to Rectify the Faulty Credit Score?

Checking your CIBIL report on regular basis is the only way to keep a track and know if there is any information which is not relevant or incorrect. Credit score related errors are generally committed by credit data providers, including banks and NBFCs. Lenders are mostly responsible for collecting one’s credit-related data and providing it to credit bureaus.

Ways to Raise Dispute in Case of Erroneous CIBIL Report

Customers should thoroughly check their personal details, such as name, address, date of birth and PAN number. If it gets mixed up with another person, it negatively impacts your credit score. Also check if your account details, loan amount, type of credit, etc. are correct.

Any dispute in the CIBIL Report can be notified by raising a CIBIL dispute resolution request. Those who have registered on CIBIL can directly raise a dispute by logging into myCIBIL. Follow the below steps to raise a dispute regarding inaccuracies in your credit report:

• Login to ‘myCIBIL’
• Click on ‘Raise a Dispute’ tab
• Select the relevant section that you want to dispute
• Select your account
• If you are disputing over ownership or duplicate information, select the same on ‘Dispute Type’ and submit the details of the dispute in brief
• If you are disputing a data inaccuracy, enter the correct value for the disputed field and submit

Importance of Good CIBIL Score

In today’s financial system, TransUnion CIBIL holds major importance as most of the banks and NBFCs consider the credit score provided by CIBIL for loan approval and disbursal. Below mentioned are some reasons for you to maintain a high credit score:

Credit approval – Banks and NBFCs approve credits on the basis of your credit score. Maintaining a high CIBIL score will automatically increase the chances of you getting approvals easily and quickly.

Lower rate of interest – The interest rate offered by the bank on any type of loan is lower for customers with high CIBIL score.

Increased negotiation options – Customers maintaining a higher CIBIL score get a variety of loans and credit cards to compare and choose with additional benefits. Lenders also prefer to offer best deals to customers with high CIBIL score.

Financial Security – Customers with high credit score are considered to be financially more secure as compared to customers with low credit score. As high CIBIL score opens the gates of several lending products and they can avail those products at the time of need or urgency.

Therefore, CIBIL score holds a lot of importance as it makes your life financially secure. High is the credit score, more are the negotiating options with the customers. To download your credit report free of cost, you can visit Paisabazaar website. Here you can check your credit score and download your credit report, absolutely free.

Also Read:

• What is Credit Information Report?
• Why Should You Review Your Credit Report Regularly?
• Missing a Single Payment Can Affect Your CIBIL Score
• What is the minimum CIBIL score required for Credit Card?
• How to Remove Name From CIBIL Defaulter List?
• How to Repair Faulty Credit Report
• Bad Credit Practice that Lead to Bad Credit Score
• How to check your Experian credit score for free?
• Common Myths About Credit Score