Credit experts say that investors should check their credit reports from time to time, and make sure that there are no mistakes in them. For instance, 31-year-old Ajay Sharma while checking his credit report, discovered that it did not factor in a debt which he had retired last quarter.
Subsequently, he wrote to the credit rating agency to request them to correct these mistakes. It is important for everyone to look for common errors in the credit report:
As you review your CIBIL report, look for these errors:
Wrong information: Verify that your personal details such as name, address, date of birth, and identification numbers are accurately reflected. Any errors here could affect your credit profile.
One should also check that all their credit accounts are correctly listed, including loans and credit cards.
Payment history: You should also review the payment history of each credit account to ensure that all payments are accurately recorded. Look out for any missed payments or late payments that you believe are incorrect.
Duplicate entries: Make sure that each credit account is listed only once. Duplicate entries for the same account can impact your credit score and overall creditworthiness.
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Incorrect credit inquiries: Verify that all credit inquiries listed on your report are legitimate and made by you or authorised entities. Unauthorised inquiries could indicate fraudulent activity.
Incorrect credit scores: Ensure that the credit score mentioned on your report is accurate and matches your actual creditworthiness.
If you find any mistakes on your CIBIL report, you should dispute them with the credit bureau and the respective lenders to have them corrected.
Frequently Asked Questions:
Why should you check your credit report?
Monitoring your credit score regularly helps you stay informed about your financial standing and any changes that may impact your ability to borrow money or access financial products.
How often should you check your credit score?
Most experts recommend to check the credit score at least once a year.
Can there be mistakes in credit reports?
It is not uncommon to spot mistakes on credit reports. So, regularly checking your credit score allows you to spot any errors, such as inaccuracies in personal information or incorrect reporting of accounts or payments.
Does applying for new loan impact the credit score?
Each time you apply for credit, it triggers a hard inquiry that can temporarily lower your credit score. So, it is advisable to limit new credit applications, particularly if you’re planning to take out a significant loan soon.
What is the key disadvantage of a low credit score?
Among several disadvantages, one of the key disadvantages is that you are likely to be offered higher interest rates even when a loan is approved.
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Published: 17 Apr 2024, 01:54 PM IST