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Low Credit Score? 6 common credit report errors that you need to look out for


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A lot has been said about the importance of checking your credit report from time-to-time. You should keep an eye on the credit report periodically, as it gives you an ideal on your financial health.

A lot has been said about the importance of checking your credit report from time-to-time. You should keep an eye on the credit report periodically, as it gives you an idea on your financial health. The main reason to keep a tab on your credit score is to check whether it has any errors. Incorrect information, identity theft, fraud and errors are some of the reasons that can result in a low CIBIL score.

Here are some of the common errors in a credit report that you should look out for:

1. Wrong personal information

This is one of the most common error that individuals come across in their credit report. The personal information like name, account number, PAN, address and so on are presented incorrectly in your credit report. If there is a mismatch between your name and your PAN card, there could be a possibility that your loan and credit card application may get rejected. However, incorrect personal information in your credit report will not have a negative impact on your credit score.

2. Incorrect payment history

In order to maintain a high credit score, you need to have extremely good payment history and avoid late or non-payment of dues. Your payment history accounts for 35% of your credit score and hence, needs to be given extra attention. Hence, it is important that you look out for any errors regarding non-payment of your bills. Sometimes, a lender may report a credit activity incorrectly. This essentially means, you have paid your bills on time and cleared all the outstanding balance, however, the lender has reported a delay or mentioned that you haven’t paid them. Your credit score can take a toll owing to such incorrect payment history records.

3. Identity theft

Another common reason for a low credit score is associated with an identity theft. An identity theft means that someone else is banking on your credit report. This means that someone else will use your credit report to get a loan or a credit card and then misuse the credit thereby taking a toll on your credit score. The sooner you are able to spot a case of identity theft, the more likely you are to prevent extensive damage.

4. Delay in credit payment update

When you increase the credit limit of your credit card, then banks can sometimes miss or delay reporting the same to the respective credit bureau. This eventually leads to a higher utilisation ratio, as you spend more thinking you have increased the credit limit. In order to maintain a high credit ratio, you need to keep a low credit utilisation ratio. A 10-30% utilisation is usually considered as ideal. This essentially means that the utilization amount should be lower than the credit limit of your card. You should also check if your monthly payments have been updated in your credit report

5. Fraudulent transactions

Scrutiny of all your credit report is important as you have to be sure all the transactions were made by you. There can be instances where you may come across an unknown account or transaction under your name. In such cases, make sure to report to your bank and raise a dispute with a credit bureau. Read More here.



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