Introduction

A topic of confusion, and discussion alike, a Credit Bureau Report is a month-on-month record of your loan related EMI payments (personal loans, home loans, automobile loans, and overdraft facilities), credit card bill payments, etc. The report can be requested by you or a credit provider (usually when you have applied for a loan or a new credit card). The report does not include your investment or savings details. It includes your personal information such as your name, date of birth, residential address, PAN, passport number, voter ID number, contact number, type of credit availed, size of the loan or credit limit, outstanding current balance, any overdue amount, number of days the payment is overdue, and the credit’s status.

Credit Bureau Report

The Credit Bureau report plays a key role in the bank’s decision when you apply for a personal loan. It contains details about your credit history and repayment history. Banks submit monthly reports of their customers to the credit bureaus who in turn generate reports for enquiry from requesting banks or individuals. The bureaus consolidate your borrowings and credit history sources from different financial institutions including banks, NBFCs and digital lending platforms into a credit bureau report. Some prominent credit bureaus in India are CIBIL, Equifax and Experian.

The credit bureau score is a 3-digit numeric summary of your credit history. The score is calculated using the information from the credit bureau report. The score ranges from 300 to 900. The higher the score, the higher your chances to get a loan approved.

Your credit score provides an indication of the probability of default based on your credit history; and how likely you are to pay back the loan should you get a loan approved. As your credit bureau report plays a huge role in your chances of availing credit, it is important that you understand what information is shared by banks and lenders with credit bureaus. Understanding your credit bureau report enables you to take control of your finances with regards to savings, budget, credit limit usage, and EMI payments.

What can affect your credit bureau score?

Late payments or defaults

Your repayment history has a significant impact on your credit bureau score. If you have regularly missed payments on any of your existing loans, your credit bureau score is likely to be negatively affected; since it indicates your trouble in servicing your loan obligations.

Multiple loan enquiries

If you have tried to apply for a loan at multiple banks or institutions during the same period of time, then this indicates ‘credit hungry’ behavior, which banks look at negatively.

High utilization of credit limit

Spending over the credit limit and increasing your outstanding balance shows signs of repayment burden and hence indicate unwise spending routine.

Ensuring a positive credit bureau report

• Always pay your bills on time
• Keep your credit card balances low
• Maintain a healthy mix of credit (a combination of credit cards, personal loan, and home loan)
• Keep some buffer time between closing credit card accounts
• If you are a co-applicant or loan guarantor, keep an eye on the repayment towards the loan
• Try not to apply for a loan multiple times during a short span of time
• Review your credit history frequently throughout the year and look for any errors.

Errors on your credit bureau report

As per Section 21 of the Credit Information Companies (Regulation) Act of 2005, you can apply at a credit institution to furnish a copy of your credit information. In case the bank informs you that your loan application is rejected based on your credit report, you can ask the bank to provide you a copy of the same.

It is a good practice to apply for a credit report directly from a credit bureau to look for any errors before you apply for a loan. This not only helps in looking out for errors and preempting any loan issues, but also for gaugeing spending patterns and repayment responsibilities.

The credit bureau report consists of information pertaining to 5 sections – Personal, Contact, Employment, Account/Credit and Enquiry.

• Personal information errors – Your name can misspell on the report. For e.g. your name is ‘Ravi Kishan’ but the report shows the name as ‘Ravi Krishnan’. Your date of birth, passport number, income tax ID number, and voters ID number could be rearranged leading to an error. Your gender could be wrongly declared.
• Contact information errors – Errors here could include quoting your old address, the State you live in being declared incorrectly. Pin code mentioned could be rearranged or incorrect.
• Employment information errors – The report might still be showing you working for your previous organization. Your monthly salary may not be updated; your current organization work period could be incorrect, etc.
• Account or Credit information – The credit type could be incorrect – instead of a home loan, a personal loan could be mentioned. The sanctioning date for a loan could be wrong, a previous sanctioned loan amount could be incorrect, the status for a loan could show ‘pending’ even if cleared, etc.
• Enquiries – The number of times you applied for a loan could be incorrect. You might have applied for a credit bureau report only once before but it could show up on the report as 2 or more. Keep in mind that too many enquiries can affect the report badly.
• Miscellaneous errors – Inaccuracy in current outstanding balance towards your credit card, multiple accounts registered in your name, the report generated is somebody else’s, etc.

Avoiding errors on your report

You won’t know about any error unless you apply for a credit bureau report yourself. We tend to undermine the importance of a credit report until we hit a roadblock in the loan application process. In case you find any error, you need to ‘initiate a dispute’ at the bureau’s website. Once the bureau receives your dispute claim, they will investigate the matter. It could take time to get a response from the bureau because the bureau has to wait for the information coming from the bank or lending institution. This can take approximately 30 working days.

In case the bank or lending institution has supplied incorrect data to the bureau with regards to loan or credit card details, then you should contact the bank and report the discrepancy. The bank will then have to contact the bureau and rectify the earlier information. This can take approximately 45 working days.

In case of a mistaken identity for a loan or card amount not availed by you, contact the credit bureau who in turn will contact the bank or lending institution and revert to you once the error is rectified. This can take approximately 30 working days. In case the bank finds the profile of the person your identity has been mismatched with, it could take more time to get the mistake rectified because the bank has to then contact the other individual to get the mistaken identity cleared.

Your credit bureau score is very important when it comes to availing a loan from banks or digital lending platforms. It is therefore your responsibility to ensure that an error prone report does not hamper your loan approval chances.

Filing an online dispute

Once you have identified an error in your credit bureau report, bring it to the attention of the bureau immediately. You notify the bureau first by sending them a letter, and then fill up the online dispute form. Your name and correct address should be mentioned on the letter and the error(s) along with evidence in the form of documents or receipts to prove that the information in the report is inaccurate or incomplete. Also attach a copy of your credit report.

When filling the online dispute form, you will need to have the Control Number. The control number is a 9 digit number found on the top right of your credit bureau report. It is generated every time a report is requested (either by the bank or by an individual). This number helps the bureau in tracking and identifying the report in dispute. You can either dispute the report ownership or the fields of an account or enquiry. You can dispute multiple fields of your report through a single dispute form.

• The first thing that the bureau does is to verify and rectify the details on its own. If it is unable to do so, the bureau will forward the dispute request to the loan provider or credit card issuing company.
• The loan provider or credit card issuing company will check their internal records to verify if the error has indeed happened at their end, or not. The loan provider will then update the bureau whether the information has been corrected or did not need to be corrected.
• The bureau then updates the report and informs you.
• If you feel there is still an error, you will have to raise another dispute request with the bureau.
• The bureau does not make any changes to your information on its own. It is only a custodian of the information received from different credit institutions. It takes approximately 30 days to resolve the dispute request but again dependent on request-to-request.
• It is possible for errors on your credit report to be corrected systematically if you have the proof to support your dispute claim. Ensure you put down a detailed explanation of all the evidence when you file your claim.

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