4 Common Credit Score Report Errors
A credit report shows lenders a person’s creditworthiness, and having errors is as bad as having bad credit.
According to Financial Express, these are 4 common errors found in a credit report:
Closed accounts being shown as open
A credit account reflects how a person is responsible for their credit accounts. A lender has a duty to report all transactions pertaining to a credit account from approval until their closure. If an account has been erroneously shown as open, it may go on to show that there are payments due towards the account and it may show as a red flag.
Or on the contrary, an account that was closed is shown as “Settled” accounts, which means they have been only partly paid the outstanding to the lender. This could mean a person has not made a clean closure and future lenders might not take it lightly.
It is best to report the error immediately and take up the matter with the lender with proof of closure of the account.
Accounts wrongly being shown as delinquent
A person may be diligent in making EMI payments, but if the lender failed to report it to the credit bureau it may end up being shown as delinquent. Delinquent accounts could mean an immediate drop in credit score and would gravely affect getting any further credit.
Incorrect credit limit or balances
If a lower credit is reported, the credit utilization ratio goes up which may end up impacting a credit score in the wrong way.
A Permanent Account Number (PAN), a string of 10 alphanumeric characters, is the basis for all reporting towards a credit report. It is quite easy to miss or get jumbled resulting in the wrong PAN being shown against a name.
A mismatch between a name and PAN is also possible. Furthermore, it may also be subject to identity theft, where someone else has fraudulently used another’s identity to obtain credit.
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