What to Do if You Find Mistakes in Your Credit Report

Credit reports are prepared based on the credit records banks and other lenders send to the credit bureaus. Sometimes, this report can have discrepancies due to clerical errors or inaccurate credit records reported by the banks and other creditors. Such mistakes can result in errors, like incorrect personal details, wrong outstanding balance, or payment status, or your report may even have a credit record of a card that was not issued to your name. These mistakes hurt your credit score and negatively influence your chances of getting a new line of credit on good terms, like lower interest rates and favourable repayment tenure. So, it is necessary to regularly examine your credit report and inform the bureau of any errors timely so that you can maintain your financial health.

Here are some of the steps you can take to ensure that your credit report is error-free:

Regularly Check your Credit Report

Make sure to check your credit report periodically and review all the details present in it, instead of just checking your credit score. You can get your report directly from any of the major bureaus, like TransUnion CIBIL, Experian, CRIF Highmark, and Equifax, which allow you to get 1 free report every year. You can also go to Paisabazaar Platform through which you can check your credit report for free multiple times in a year and also get monthly updates for the same. During a thorough report review, look out for any errors regarding your personal details, loan-related information, outstanding balance, repayment history, etc. Such common and seemingly small mistakes can have a detrimental effect on your credit score, if not corrected in time.

Report any Errors to the Credit Bureau

Note down any discrepancies you may have found while reviewing your credit report. You can then submit the claims of the disputes to the respective bureau to get them corrected. Though the credit bureaus resolve these issues free of cost and have their own procedure for claiming disputes, most offer the option to submit an online form, write an email, or send a letter to the registered office. While highlighting the incorrect information on your credit report, you must also collect and attach documents like billing statements, updated outstanding balances, copies of correspondence with banks or lenders, and other relevant documents, as proof to support your claim.

Contact the Bank or Lenders

Since the credit bureaus prepare your credit report based on the information shared by the lenders, the inaccuracies in your report might be due to the lender providing incorrect details. In such a case, you also need to contact your creditors directly to get the information rectified at the source itself and request them to report the updated information to the credit bureaus.

Verify Status of the Updated Credit Report

Once you have raised the issue with the credit bureau as well as the lender, it usually takes around 30 days to resolve it and update your report. The credit bureau takes this time to investigate and verify the claim using the document proofs you provide and contacts the concerned lender to cross-check the claim made. Until verified, the bureau temporarily removes the disputed information and later informs you of the outcome of that investigation. The corresponding updates will reflect on your report after some time. So, you can check your credit report a couple of months after raising the dispute to confirm that your report and credit score have been updated. However, you need to contact your lender and the concerned bureau, if no change has been made or no update has been shared even after several months.

An erroneous credit report can drop your credit score and thus affect your creditworthiness. This, in turn, would negatively impact your chances of getting a new line of credit as well as the terms on which it would be offered. So, it is recommended that you not only make efforts to maintain a high credit score but also routinely review your credit report to ensure that it doesn't have any flaws. In case there is any discrepancy in your report, it is advisable to report it and initiate its correction as soon as possible to avoid any negative consequences.