Credit score dropped? It could be an error — Here’s how to rectify and correct it

In India sustaining an accurate credit report and a robust credit score is crucial as it directly impacts personal loan approvals and also influences applicable interest rates. Still, discrepancies can occur potentially influencing your financial prosperity.

The Reserve Bank of India (RBI) has implemented measures to ensure timely updates and accuracy in credit reporting by credit agencies and also provide borrowers with a platform to consistently check their credit scores once every year. This transparency helps in making the entire system more efficient and borrower friendly.

What are some common credit report errors?

Errors or mistakes in credit reports can arise from various factors such as:

• Mistakes in personal details: Errors such as wrong addresses, misspelled names, inaccurate date of birth entries, incorrect data updates etc., are some examples of mistakes in personal details.
• Inaccuracy in account information: Closed accounts marked as open accounts, incorrect display of loan amounts or erroneous payment details along with improper payment histories are examples of inaccuracy in account information. Such errors should be promptly disputed.
• Unauthorised credit inquiries: Now there can be instances for loans background checks, verifications and inquiries that you did not initiate. Even such checks and inquiries should be discussed and promptly disputed with your credit rating agency.
• Duplicate accounts: Same account appearing multiple times due to system errors or backend mistakes. This can lead to inflated credit exposure. Even in such cases there are errors in credit reports that pop up.

What are the steps to rectify errors in your credit report?
 

1. Obtain a copy of your credit report: The first step is to obtain a copy of your credit report. According to RBI guidelines you are entitled to one free credit report annually from each credit information company (CIC) such as Experian, Equifax, CRIF High Mark and TransUnion CIBIL.
2. Check carefully and identify discrepancies: Once you have the report with you, post the same you should carefully check and review your report for any inaccuracies or errors in personal or financial information.
3. Raise a dispute: Now in case errors are found, try to initiate a dispute through the respective CIC’s official website. For example, CRIF High Mark and CIBIL both provide a ‘Dispute Resolution’ section on their respective websites. Through this section you can specify the inaccuracies, mistakes and submit the documents backing your claim.
4. Notify the financial institution: On your part you should also provide information to your concerned bank or NBFC about the discrepancy, thus providing necessary evidence for them to take corrective action.
5. Regular follow up: Once the process of dispute submission is complete, you should regularly monitor the status of your dispute. CICs generally resolve problems and disputes within 30 days, updating the report accordingly. Still, for complete clarity on this it is better for you to refer to the official website and dispute resolution portal of your respective credit bureau.

Regulatory measures

To boost the accuracy of your credit rating and score related information, the RBI has come out with a new rule stating that NBFCs and banks update credit bureau reports every 15 days.

This improvement has been implemented from January 2025. The objective of this step is to reflect borrowers' financial activities more accurately and in a timely manner.

Conclusion

Hence, consistently reviewing your credit profile and credit report along with addressing any errors is crucial for maintaining a health credit score.

Staying informed about regulatory changes along with understanding the process of dispute resolution can safeguard your financial integrity and long term economic interests.

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.