Wrong Loan in CIBIL Score

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 Wrong Loan in CIBIL Score: Causes, Impact, and Solutions

A healthy CIBIL score is essential for securing loans and credit cards with favorable terms. However, many individuals face issues where a wrong loan is rep


orted on their CIBIL report, negatively affecting their creditworthiness. If you have encountered such an error, it is crucial to understand its causes, impacts, and the necessary steps to resolve it.

Causes of Wrong Loan in CIBIL Report

Several factors can lead to the presence of an incorrect loan entry in your CIBIL report:

  1. Clerical Errors by Banks or NBFCs – Sometimes, financial institutions may make mistakes while updating loan details, leading to incorrect reporting.

  2. Identity Theft or Fraud – If someone has fraudulently obtained a loan using your personal details, it will reflect in your CIBIL report.

  3. Incorrect PAN or Aadhaar Linkage – Mislinked documents can cause another person’s loan to appear on your report.

  4. Duplicate Loan Entries – At times, a single loan may be reported multiple times, making it appear as if you have more debt than you actually do.

  5. Settled or Closed Loan Still Active – Even after repaying or settling a loan, the lender may fail to update CIBIL, causing it to reflect as active or overdue.

Impact of a Wrong Loan in CIBIL Report

An incorrect loan in your CIBIL report can have severe financial consequences:

  1. Lower Credit Score – A wrong loan, especially with missed payments or defaults, can significantly drop your score.

  2. Loan Rejections – Banks and NBFCs may reject your loan applications due to a high debt burden or poor credit history.

  3. Higher Interest Rates – Even if approved, you may face higher interest rates due to a lower CIBIL score.

  4. Legal Issues – If the wrong loan is due to fraud, you may have to deal with legal proceedings to clear your name.

How to Remove a Wrong Loan from CIBIL Report

If you discover an incorrect loan in your CIBIL report, follow these steps to correct it:

Step 1: Obtain Your CIBIL Report

  • Visit the official CIBIL website (www.cibil.com) and request your latest credit report.

  • Review all loan accounts carefully to identify discrepancies.

Step 2: Raise a Dispute with CIBIL

  • Go to the CIBIL website and navigate to the ‘Dispute Resolution’ section.

  • Fill out the dispute form, providing accurate details about the incorrect loan.

  • Attach supporting documents like loan closure certificates or identity proof.

Step 3: Contact the Lender

  • If the error is from a specific bank or NBFC, reach out to their customer service.

  • Submit a formal request with evidence to correct the mistake.

  • Follow up regularly to ensure timely resolution.

Step 4: Report Fraud (If Applicable)

  • If the wrong loan is due to identity theft, file a police complaint.

  • Inform CIBIL and the concerned financial institution about the fraud.

  • Request a fraud alert to be placed on your credit report.

Step 5: Monitor Your Credit Report

  • Regularly check your CIBIL report to ensure no further errors occur.

  • Use credit monitoring services for real-time alerts on changes in your credit profile.

How Long Does It Take to Rectify the Error?

CIBIL typically takes 30-45 days to investigate and resolve disputes. The correction process involves verifying details with the lender before making amendments.

Preventive Measures to Avoid Wrong Loan Issues

  • Check Your Credit Report Regularly – Review your report at least once every six months.

  • Secure Your Personal Information – Avoid sharing sensitive details like PAN, Aadhaar, or bank details with unknown sources.

  • Verify Loan Closure – Always collect a No Dues Certificate (NOC) after closing a loan and ensure the update is reflected in CIBIL.

  • Monitor Loan Statements – Regularly check your loan EMIs and statements for any discrepancies.

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