Your CIBIL score is a critical factor in determining your credit eligibility. Whether you’re applying for a home loan, car loan, or even a credit card, lenders often check your CIBIL report to assess your financial responsibility.
But what if you’ve never taken out a loan and yet, a loan account shows up in your report? Sounds confusing and worrying, right?
This kind of discrepancy is more common than you might think and can negatively impact your credit score, making it harder for you to get a loan in the future.
In this blog, we’ll explore the possible reasons for such an error, its consequences, and how you can get it corrected.
Common Reasons for a Loan Appearing in Your CIBIL Report
Data Entry Errors
Mistakes can happen during data collection and processing. A simple error, such as a typo in the account number or PAN details, can lead to another individual’s loan details reflecting on your CIBIL report.Identity Theft or Fraud
If someone uses your personal information to take out a loan without your knowledge, this will appear in your CIBIL report. Fraudulent activity like this can severely damage your credit score if not addressed promptly.Closed Loan Not Updated Properly
In some cases, you may have taken a loan in the past, but despite repaying it, the lender didn’t update your CIBIL report to reflect that it’s been closed. This could leave you with a loan showing as still open.Incorrect Reporting by Lenders
Lenders send your loan details to CIBIL periodically. If they report inaccurate or incomplete data, a loan you never took may show up in your credit history.Shared PAN or Financial Information
Sometimes, if you’ve been a co-borrower or guarantor for someone else’s loan, this could get wrongly reflected as your loan in the CIBIL report, especially if the data is not correctly assigned.
Impact of Incorrect Loan Data on Your Credit Score:
Lowered Credit Score
If a loan that doesn’t belong to you shows up in your CIBIL report, especially one with late payments or defaults, it can lower your CIBIL score. This may affect your ability to get credit in the future.Rejection of Future Loans
A low CIBIL score due to incorrect information can lead to loan rejections, even if you have a clean financial history. This can also lead to higher interest rates on approved loans.Stress and Anxiety
Seeing incorrect loan information on your report can cause unnecessary stress and financial anxiety. It’s important to resolve such issues as soon as possible to avoid any long-term effects.
How to Correct an Erroneous Loan Entry in Your CIBIL Report:
Step 1: Get a Copy of Your CIBIL Report
The first step is to get your CIBIL report from the official CIBIL website. Look through the report carefully to identify any discrepancies, such as loans you never applied for.Step 2: Raise a Dispute with CIBIL
CIBIL provides an online dispute resolution process. You can raise a dispute by logging into the CIBIL website, selecting the incorrect loan entry, and submitting a dispute. Make sure to provide any relevant details that can help prove your case.Step 3: Contact the Lender
If you identify the lender responsible for the erroneous entry, contact them directly. They can update their records and inform CIBIL to correct your report. Keep a record of all communications for future reference.Step 4: Follow Up Regularly
Credit disputes can take time. Be sure to follow up regularly with both CIBIL and the lender until the issue is fully resolved.
Conclusion
While errors in your CIBIL report can be a cause for concern, they are fixable. Whether it’s a data entry error or an instance of identity theft, taking immediate action will help restore your creditworthiness.
Regularly checking your CIBIL report, raising disputes, and communicating with lenders are the best ways to maintain a clean credit history.
If you suspect errors in your CIBIL report or need help navigating the loan process, we at Adiguru Financial Services can guide you through the complexities of credit management.
Contact us at info@adigurufinancialservices.com or call +91 886 652 9124 | +91 989 840 9871 today to get personalized advice and solutions tailored to your financial needs!
FAQs
What is a CIBIL report?
A CIBIL report is a summary of your credit history, including loans, credit cards, and repayment behavior, used by lenders to assess creditworthiness.
Why is a loan showing in my CIBIL report when I never took one?
This could be due to data entry errors, identity theft, incorrect reporting by lenders, or a loan you co-signed or guaranteed.
How does incorrect information in my CIBIL report affect me?
It can lower your credit score, making it harder to get future loans or credit cards, and may result in higher interest rates.
Can I dispute an incorrect loan entry in my CIBIL report?
Yes, you can raise a dispute on the official CIBIL website and follow up to get the error corrected.
What is identity theft in the context of a CIBIL report?
Identity theft occurs when someone uses your personal information to take out a loan or credit card in your name without your knowledge.
How long does it take to resolve a CIBIL dispute?
Typically, it takes 30-45 days to resolve a dispute, but this can vary depending on the complexity of the case and lender cooperation.
Can a closed loan still show up in my CIBIL report?
Yes, if the lender hasn’t updated CIBIL after closing the loan, it might still appear as active in your report.
How often should I check my CIBIL report?
It’s recommended to check your CIBIL report at least twice a year to ensure there are no discrepancies.
Will raising a dispute affect my CIBIL score?
No, raising a dispute won’t directly affect your CIBIL score. However, resolving incorrect entries can improve your score.
What if the lender refuses to correct the error?
If the lender refuses to correct an error, you can escalate the issue with CIBIL, providing all relevant documentation to support your claim.
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