An error on your credit report can be highly disappointing and can have a long term bearing on your credit health. Even a small error on your CIBIL report has the potential to have a major implication of the credit score. These errors since can lead to your loan application declined, have the potential to severely impact your financial life. Unavailability of funds at the time of need can lead to financial loss.
Let us understand the kind of discrepancies that can impact your credit score
Errors in your personal details like name, address, contact numbers or email ids etc are a common place. While the primary reason could be on account of erroneous reporting or capturing of data at the lending institution’s end; these errors have potential to creating misperception in an underwriter’s mind and negatively impacting the decision on loan application.
Errors in Identification documents
Errors on PAN Card, UID Card or other identity proofs can be devastating since it would lead to a wrong report getting presented to the underwriter.
Whenever a bank requests the credit bureau for your credit report, it gets captured as an enquiry on your report. These enquiries have the potential to have a detrimental impact on your credit score. An enquiry not initiated by you but still forming part of the report would get construed as a loan being rejected by another lending institution and hence can be misleading the decision on your loan application.
More importantly, it can also be on account of some fraudulent activity initiated on your account that can have serious repercussions on your financial life.
Repayment on existing credit facilities
All your repayments get captured and any error in this section not only can lead to pulling down your score but also showcasing you as a defaulter on your existing credit facilities.
Negative Flags’ section may reflect a ‘Settled” account when the account was actually “closed” will all dues cleared. Negative flags are the factors that, if present, could be detrimental to your credit health and also make lenders declining your request for any credit facility.
Since these errors can deleterious impact your credit and financial health, it becomes highly important to keep checking your credit report on a regular basis. In case of any anomaly or error getting detected, the same should be highlighted to the concerned bank or lending institution immediately.