Mistakes in credit reports can seriously affect one’s financial credibility. They can influence loan approvals, credit card clearances, and the seamless availability of credit to meet daily expenses. Due to the advancement of technology, credit scores now play an even greater role in lending decisions of lending institutions.
That is why it becomes vital for aspiring borrowers to clearly understand the concept of credit profiles, credit scores, and the best possible way to raise disputes to achieve a blemish-free score that can, in turn, help them secure better credit cards and personal loans in the future.
Why should you check your credit report regularly?
Credit reports are nothing but the financial report card of an individual. These reports can carry typographical mistakes, outdated records, or duplicate entries. Such flaws can weaken your creditworthiness and leave a poor impression on lenders.
Consistent review of your reports can help catch such problems early. The Reserve Bank of India (RBI) mandates several leading credit bureaus in the country, such as CIBIL, CRIF High Mark, Experian, and Equifax, to update borrowers’ information every 15 days. Diligently following these mandates ensures that the rights of both borrowers and lenders are protected. It also ensures that real-time data on borrowing potential is shared across lenders to better facilitate accurate decision-making.
How to file a credit score dispute
- Log in to your credit bureau account through its official website.
- Navigate to your credit report and identify the mistake accurately.
- Select the ‘Raise dispute’ option.
- Fill out the dispute form by providing complete details of the errors.
- Attach supporting documentation such as receipts, personal details, or identity verification.
What happens after you raise a credit score dispute?
Once the dispute has been filed, it will be marked as ‘Under Dispute,’ i.e., a new channel will be opened for its resolution. Credit bureaus will then verify with lending institutions and update records within thirty days, in line with guidelines. Consumers are also kept in the loop and informed of the complete resolution through email or post, after which the ‘Under Dispute’ label is removed.
Manish Shara, Co-founder and CEO of ZET, points out,“RBI’s Master Direction on Credit Information Reporting gives consumers the right to raise disputes with their bank or directly with credit bureaus through online forms, email, or written communication. These institutions are required to investigate and respond within 30 days. Many users are surprised to discover errors or misreporting in their credit reports, and once these disputes are resolved, they often find themselves in a far stronger financial position with renewed confidence in their credit journey.”
What do different credit score ranges mean in India?
| Credit score range | Description | Impact on loan approval |
|---|---|---|
| 750 and above | Excellent | High approval chances, best terms |
| 700 to 749 | Good | Likely approval, favourable terms |
| 650 to 699 | Fair | Possible approval, on moderate terms |
| 550 to 649 | Poor | Difficult approval, higher interest |
| Below 550 | Very poor | Likely rejection |
Note: The credit score range discussed above is illustrative. For the updated details on credit scores, refer to the official website of your respective credit bureau.
How can you ensure your credit score dispute is successful?
- Clearly specify the mistake and the correction needed in your credit report.
- Provide comprehensive documentation for evidence.
- Regularly follow up and track status online.
- Keep all communication in proper order and safely secured online.
- Escalate unresolved issues to the RBI’s Ombudsman.
In conclusion, by carefully following the process and staying devoted, consumers can protect their credit profiles and financial integrity and ensure that a fair evaluation is done for the credit facilities they avail themselves of.
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Disclaimer: Mint has a tie-up with fintechs to provide 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 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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