Improving errors and mistakes in your credit report is important for maintaining a healthy credit score. It can help in ensuring seamless availability of credit facilities.
A credit score is a simple three-digit number that defines an individual’s creditworthiness. Mistakes such as incorrect personal details, erroneous past loan entries, or outdated loan information can result in significant credit score correction, impacting loan approval chances.
Therefore, credit reports should reflect the actual financial reality of an aspirational borrower. On this, Akshay Aedula, Head, Product and Growth CRED, says, “Your credit report should reflect the truth, and fixing errors on it costs you nothing. Both the credit bureau and the company that provided the information are required to investigate and correct mistakes at no charge when a dispute is raised.”
He further added, “You should review your details carefully and regularly, raise disputes when you spot inaccuracies, and follow up until they are resolved. Even small errors can materially impact your score, so don’t ignore them. A clean, accurate credit report is not just paperwork; it’s fundamental to better financial opportunities.”
Therefore, aspirational borrowers should keep the above factors in mind. Furthermore, here are six easy ways to correct errors in your credit report:
1. Check your credit report regularly
Check your credit report at least once a month. This will help you in spotting errors and inaccuracies early. To accomplish this, you can also set reminders to never miss out on following up on your credit report. Focus on important facts and personal information such as your address, name, date of birth, PAN details, and other similar data points. This needs to be done to ensure they are accurate and updated. Also, verify personal loan accounts to match and eliminate duplicate entries, closed accounts still mentioned as open or unknown loans marked against your name.
2. Raise disputes and errors promptly
If you find mistakes in your credit report, then you should file a dispute through the credit bureau’s official website. This is a straightforward process that involves the submission of a dispute form explaining the error, along with supporting documentation such as bank statements, payment receipts, or other facts detailing the issue clearly. Timely action can prevent further damage to your credit score and your creditworthiness.
3. Verify outstanding balances
You should make sure that the reported credit limits and loan balances comply with your records. Inaccurate credit or outstanding amounts can mislead lending institutions about your repayment potential. To address such inaccuracies, you should send e-mails or directly call your respective credit bureau. The details of the same can be found under the ‘Contact Us’ section of credit bureau websites.
4. Maintain good credit integrity
Timely payments of personal loan EMIs, home loans, and credit card bills greatly benefit an individual’s credit score. In modern credit score calculation systems, on-time payment approximately makes up 35% of the total score calculation. That is why setting up reminders or auto-debits can assist in avoiding missed payments that bring down credit scores.
5. Limit credit applications
Applying for many different credit lines, such as credit cards, personal loans, or home loans, within a short period of time is symbolic of credit hunger. Such behaviour should be avoided as it can result in frequent credit inquiries and showcase ‘credit hunger’ to the lending institutions. It can also bring down your credit score temporarily. That is why you should space out applications and apply for new credit only when it is needed.
6. Keep records of all communications
This is another very important point. You should maintain proper records and documentation of all disputes, emails, filings, and responses from lending institutions or credit bureaus. Having an elaborate paper trail assists in carrying out proper follow-ups and strengthens your case if the error continues to persist.
Hence, by following these easy steps, you can rectify and improve your credit report mistakes effectively. In the long run, improving credit scores can help unlock better financial opportunities.
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Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
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