Can errors in reporting cause a bad credit score?
Yes, errors in credit report can lead to a bad credit score be it CIBIL, Equifax or Experian. This is why you are advised to check your credit report every half yearly or quarterly to avoid confusion and to improve and maintain a good CIBIL score. When a CIBIL report contains errors it is mostly because of the Credit report being incomplete or information not being updated properly or contains information about someone else.
An error is an information on your report which should not be there. This could happen because the information is not yours or incorrectly reported in your report. A few errors can be:
• Having a credit card or a loan listen in your account which is not yours and does not belong to you.
• The account was closed, but it was not listed as closed by the provider.
• A collection that is being paid off but still showing as unpaid.
Personal information errors be like:
• Wrong name being listed.
• Address where you have never lived or never used as a mailing address.
If your credit report has missing information, that doesn’t necessarily mean there is an error because all your information doesn’t necessarily have to be listed in your credit report.
What effect can errors have?
By having errors in your credit report, this could affect whether you will qualify for a product or not (credit card or a loan). But personal information errors don’t typically effect affect your credit score. But they could alert you to reporting an issue or even a fraud.
What should I do next when I find there is a fault in my credit report?
If you have found an error in your credit report, what to do next depends on what type of error it is. You can either talk to the bank which provided you a credit card / loan or take it up with the bureau. Alternatively, you can approach any credit management companies who help to resolve your issues by filling a dispute with the Credit Bureau which helps to speed up the process.
When will my dispute be resolved?
Once you have filled the dispute with the credit bureau and the banks, they need to follow up and investigate your dispute within 30-45 days on receiving the notification of the dispute. The credit bureaus have solved 70% of the disputes within 15-20 days.
Therefore it is important to dispute incorrect information on your credit report, because it will have a significant impact on your credit health and your financial future. In a few cases, this is one of the easiest way to make an impact on your credit score.