Your credit report is a gateway to your financial fitness, and is the first document a lender reviews in depth when you apply for a loan or credit card. Very often, the decision of whether to lend or otherwise is based on the information contained in the report and hence maintaining a good, clear report assumes an important role.

A credit report is generated basis the information provided by lenders on your credit history, taking into account both past as well as ongoing live loans and credit cards. Essentially, your repayment track record, number and types of accounts, as well as the credit utilisation ratio are some of the major parameters taken into account when building the credit report. A report is thus generated by a credit information company, or credit bureau of which there are four currently licensed to operate in India, namely CIBIL, Equifax, Experian and CRIF High Mark. Each of these bureaus offers reports and you can avail of a copy of your report from any or all of these bureaus, upon payment of a nominal fee.

What then is a CIBIL report?

A CIBIL report is nothing but a credit report. However, with the organisation being India’s oldest bureau, people tend to refer to a credit report as a CIBIL report colloquially. Currently, there is no free CIBIL score, but you can always get a free credit score online.

Help! I see negative items on my report!

Well, let’s not hit the panic button just yet! Firstly, let’s understand the type of negative items that can be on your report, and why, and then look at the options you have to have this information corrected.

Every report contains basic information such as your personal details, including:

Your full name

Contact information, i.e. your address (both residential and workplace)

Date of birth

Gender

PAN details

Passport number

Employment information, i.e. pertaining to your occupation and income

In addition – and what forms the crux of your report – are the details that pertain to your loan and credit card accounts. This section is the most important and contains:

Name of the lender

Type of credit facility (home/ auto/ personal loan, credit card)

Account numbers

Date the account was opened

Date of last payment

Loan amount

Current balance

Overdue amount (if any)

This section of the credit report also contains a month-on-month record of all your payments for the last 36 months.

Now let’s take a quick look at what could be the negative items on your report, and why:

You see an account mentioned therein that does not pertain to you, such as a home or personal loan you have not availed of. This could be an instance of identity theft, wherein an account has been opened in your name by obtaining your personal details fraudulently. A serious concern, this is something you cannot afford to neglect if on your report.

Sometimes, an error can occur even by oversight on the part of the lender, if they furnish incorrect or inaccurate information to the bureau. This could be wrong account information, or reporting that an account is overdue when it actually isn’t – but whatever is the case, it can affect your score negatively and needs to be sorted out.

Accounts wherein you have made late payments will also reflect on your report, but once the account has been closed or settled with the lender, the information should also be updated as such with the bureau. Hence if you do close an account, it is prudent to call for your report and check the updated status.

My report also shows a red band! What is that about?

When you see a red band on the left hand side of your report, it means that that particular account(s) is under dispute and is awaiting resolution. Until such time that the dispute is resolved, the band will stay. Upon closure of the dispute (on confirmation of information from the concerned lender), the status of the account may change.

What is a CIBIL dispute?

When you need to have information rectified in your report, the process is known as ‘dispute resolution’ with the concerned credit bureau.

The following are the fields you cannot dispute in your report; other than this everything else can be put up for resolution:

Control number

Member name

Account number

Date account is reported

Enquiry date

Note: Member name and account number can be disputed only in case of an ownership issue.

Tell me about the dispute resolution process!

With CIBIL being online, possibly the quickest way on how to correct a CIBIL report, or raise a dispute is to fill in the online dispute resolution form, or write in to the organisation with your dispute details.

Steps in the process:

Submit the dispute

CIBIL takes it up with the concerned lender

Lender reverts to CIBIL

CIBIL updates your credit report as per the information provided by the lender

Typically, the turn around time for this process is 30 days, depending upon the time taken by the lender in question to revert to CIBIL.

What else do I need to know?

When raising a dispute, do keep in mind:

Provide proof wherever possible, for instance, proof of payment in case of a closed account

Maintain records of your communication with the bureau

Check your credit report once the dispute has been resolved

When negative information in your credit report is accurate, there’s really not much you can do about it, however. That is a blemish that will stay on your credit report until such time that it gets struck off. Some information for example, can stay on your record for 7 years before it is knocked off.

In conclusion

It is a good practice to check your credit report at periodic intervals to make sure that the data contained in the report is accurate and pertains only to you, and accounts opened by you. Like the adage goes, it is better to be safe than sorry, and finances are something you cannot afford to take a risk with!

written by Arun Ramamurthy, author of “Unlock the Power of Your Credit Score” : India’s first book on credit scores