How to fix credit report errors: Dispute on bureau site, alert lender

Having documents like no-dues certificates and records of repayment will strengthen your case

The Reserve Bank of India (RBI) has proposed a unique and secure borrower identifier to reduce duplication and misreporting in credit bureau records. Until this is implemented, borrowers must handle these issues themselves.

 

Common errors in credit reports

 

Discrepancies in Indian credit bureau data include incorrect names and addresses. “There could be phantom loans that borrowers never took, mismatched account numbers, and outdated loan status, such as closed loans still being reported as open,” says Abhishek Kumar, Securities and Exchange Board of India (Sebi) registered investment advisor and founder, SahajMoney.com.

 

Borrowers with similar names often get mixed up, resulting in one person’s defaults showing up in another’s report.

 

Duplication is another frequent issue—the same loan may be reported multiple times in a person’s credit report. Sometimes, the same PAN or Aadhaar gets linked to more than one loan due to clerical errors. If a loan is sold to a collection agency, both entities may report it, causing it to appear as two separate liabilities.

 

Clerical mistakes by lenders—such as entering incorrect personal or account details—are the most common cause of errors. “Delay in updating repayment status is also quite common,” says Kumar. Defaults may also be wrongly reported.

 

Impact on creditworthiness

 

Credit bureaus depend entirely on data provided by lenders and do not have the mechanisms to independently verify its accuracy. Incorrect or duplicated data can significantly lower a borrower’s credit score.

 

“It can impact their chances of getting approved for new loans and cards,” says Radhika Binani, chief product officer, Paisabazaar.

 

Even when borrowers repay fully and on time, their credit reports may wrongly show ‘default’ or ‘settlement’. “The credit score can fall significantly. Many lenders may outrightly reject the borrower’s application. Even if a lender approves their application, it is likely to charge a higher interest rate,” says Binani. 

 

Filing a dispute

 

To report errors, borrowers can visit the official website of any of the four credit bureaus: TransUnion CIBIL, Experian, Equifax, or CRIF High Mark. They can go to the dispute resolution section and fill out the form, clearly mentioning the account and the nature of the error. “Inform the bank or lender directly. When both the bureau and the lender are alerted, resolution happens faster,” says Yatnesh Mittal, head – business growth and strategy, ETHERA, neo collections platform, Creditas Solutions.

 

RBI guidelines mandate that bureaus resolve complaints within 30 calendar days. “Common errors, like incorrect balances or closed loans still appearing as open, often get resolved in 10–15 working days. More complex issues, which involve identity mismatches or fraud, can take close to 30 days,” says Mittal. If resolution is delayed without valid reason, RBI mandates a compensation of ~100 per day.

 

Maintaining key documents can strengthen a borrower’s case. These include the no-dues certificate or loan closure letter, bank statements showing repayments, a highlighted copy of the incorrect credit report, and ID/address proof. 

 

Check reports regularly

 

Review your credit report every quarter, and at a minimum, every six months. RBI allows one free full credit report per year from each bureau.

 

Verify personal details while reviewing the report. “Make sure that your name, address, phone number, and other details are correct,” says Adhil Shetty, chief executive officer, BankBazaar.com.

 

Also, verify repayment history. “The dates of all the payments you have made must be reflected correctly,” says Shetty.

                                        Consequences of a poor credit score 

*  Lenders are more likely to reject applications for loans and credit cards

  *  Even if a loan is approved, such borrowers receive less favourable terms — higher interest rates or lower loan amounts

  *  Individuals with low scores have little leverage to negotiate for better terms, such as waiver of processing fees or flexible repayment terms

  *  A poor credit profile can restrict access to instant or pre-approved credit during emergencies