Credit score dropped suddenly? How to spot and fix credit report errors fast

Maintaining an accurate credit report and a high credit score is essential, especially for securing personal loans at lower interest rates.

A strong credit score not only improves loan eligibility but also ensures access to better financial products. Still, errors or mistakes in credit reports can arise and negatively affect your overall credit health.

To safeguard borrowers, the Reserve Bank of India (RBI) has introduced strict guidelines that ensure credit information companies update credit reports regularly and accurately. Additionally, individuals in India are entitled to access one free credit report every year from each credit bureau, helping them stay informed and proactively manage their credit score.

Top credit report errors that can hurt your credit score

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 personal 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.

How to dispute and fix credit report errors

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.

RBI mandates fortnightly credit report updates by banks and NBFCs

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 particular move aims to ensure that recent repayments, credit card activity, and loan closures are reflected promptly in seamless fashion on your credit report. This step will help borrowers maintain a more accurate and timely credit score profile.

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.

Understanding credit score ranges and what they mean

Note: The credit score ranges and categories mentioned above are illustrative in nature and may slightly vary across different credit bureaus. Always refer to your official credit report for accurate information.

How can you fix your credit score drop?

To fix a credit score drop, you should begin by checking your credit report for errors and disputing inaccuracies with the credit bureau. Pay outstanding dues on time, reduce credit utilisation, avoid multiple loan applications, and maintain a balanced credit mix. Consistent financial discipline gradually improves your credit score over time.

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

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