How To Get CIBIL Score Corrected?

Today I am going to teach you a step-by-step process that will help you correct wrong entries in your CIBIL report, which will, in turn, improve your CIBIL score. Most investors take out some kind of loan, and if they are not able to pay the EMIs on time or default on the loan, their CIBIL report gets messed up, and they don’t get further loans in the future.

This is because once your credit history becomes bad, lenders are not very excited to give you loans.

Correct Credit Report Mistakes

How to Correct the CIBIL Record?

I recently got a question from Chandan Kumar , who saw a wrong entry in his CIBIL report. See what he says:

I have an error in my CIBIL report that I applied for a loan in 2009. But it is a wrong entry. How can it be corrected?

CIBIL reports can contain mistakes either due to the investor’s mistake and their ignorance, but many times the errors happen because of bank mistakes or manual issues.

Some Reasons for Mistakes in the Credit Report

• The lender did not update the correct remarks with CIBIL.

• The lender updated the wrong remark with CIBIL.

• CIBIL makes a mistake in the name, address, gender, or date of birth while creating the report.

• The mistake happened while generating the CIBIL report.

• There was some fraud using your documents, and hence the wrong entries.

4-Step Process for Correcting CIBIL Mistakes

Let me help you with the step-by-step process if you want to fix the errors in your credit report. Here you go:

Step #1: Check Your CIBIL Report

You will not be able to move ahead unless you properly understand your current situation. So the first step is to apply for your CIBIL report and understand it properly.

You can go to the CIBIL website and pay the fees to get your report. Once you pay the CIBIL charges, you will receive the PDF report in your mail almost instantly, which will contain your credit score and the report. Below is a nice video tutorial by the CIBIL team that shows you how to read the CIBIL report.

Step #2: Raise a Dispute Resolution with CIBIL

Once you have understood your report, you should make a list of all the errors and mistakes in the report.

After that, your first point of contact is CIBIL. You should raise something called a CIBIL Dispute Resolution at CIBIL Dispute.

You need to fill up some details and mention the issues in your report which you think should be corrected. Once you do this, your dispute will get recorded and CIBIL will get in touch with the lenders one by one and ask them to relook at the issues if they would like to send a new update (the correct one).

Note that CIBIL will never make any changes in your report themselves. They will only do it once they get a go-ahead from the lender because, at the end of the day, your CIBIL report is the collection of all the information CIBIL gets from various lenders.

How Online Dispute Resolution with CIBIL Works

It can take anywhere from a few days to 30 days for your dispute resolution to get sorted out. But I suggest waiting for 45 days. If you have questions on this, I suggest you read the FAQ on dispute resolution here.

This dispute resolution can be raised even if you have not bought the report yourself but got it from the lender while applying for some loan.

Now, in this case, it might happen that the lender refuses to correct some information because they think that they are correct and the investor is wrong. In which case the investor should take the third step.

Step #3: Contact Lenders Directly

If the dispute resolution works, then the changes will happen in the report. But at times, some lenders might disagree on some points and refuse to make the changes.

At this point, CIBIL can’t do much, and you will now have to follow up with the lender yourself.

Let me give you an example.

Suppose there is a guy who checks his credit report and sees that one of the loans he paid off fully is marked as “WRITTEN OFF.” In this case, he can raise a dispute resolution with CIBIL, and let’s say the lender says that the loan was still not paid off and some amount was remaining and with interest and late payment charges, the loan becomes bigger and later they marked it as WRITTEN OFF.

In this case, the guy has to contact the lender himself and then sort things out.

He can ask for all the explanation proofs and loan statements and prove if there was any loan outstanding or not. In this case, it would have helped if the person had taken an NOC once he thought that the loan was complete and paid off.

Contact Lender Through Email and Phone

Coming back to this point, the first step is to send an email to the lender, stating your case with proper dates and the error in the report. If possible, also attach a snapshot of the CIBIL report. Then wait for a few days for their response, and if you don’t get any response, you should visit their branch in the city.

Meet the manager there or whoever is in charge of the CIBIL loans section. If 30 days are over and you are not getting any proper response, it’s time to raise an online complaint with the banking ombudsman. This way, you have at least raised one leg of investigation and waged a war against the lender.

To give you an example, see how the lender did not update the correct status with CIBIL in this case below:

I have taken a loan from Fullerton India long back and paid the same. They have also given me an NOC. But the same is still not updated in CIBIL records. My financial status is now good, and I can pay loan installments regularly. I am well-salaried and paying IT also regularly. Can this improve my CIBIL score and can I get a loan?

In case you face any issues, feel free to contact the CIBIL team. Here are the CIBIL contact numbers. Call their customer care number and mention your issues; at times, this can bring faster results.

Step #4: Close Your Past Dues and Outstanding Amounts, if Any

Finally, once you contact the lender, it might happen that there was a genuine mistake from the lender’s end. If they agree, they will update the correct status with CIBIL, and your issue will get resolved in 60-90 days. But if not, then mostly the issue is due to some past outstanding amount which was not paid.

Loan Settlements and Not Paying EMI on Time

In most of the cases I have seen, the issue is some past loan for which 100% outstanding was not paid off by the investor and it was settled for a lower amount. For example, suppose you owe Rs 1 lakh in the loan, but are unable to pay it, and you do the settlement for Rs 60,000. Years later, you then see a remark on your CIBIL report which says “SETTLED” or “WRITTEN OFF.” At this point, the situation is very bad because most investors don’t want to pay this surprising amount just to fix things.

Check out this real-life case:

*I took a durable loan with Capital-First in Feb 2014 with a period of 9 months. I paid the first 6 EMIs on time but the last EMI I didn’t pay. One fine day, I got a call from the Capital-First legal team, and they asked me to clear the rest of the amount. So I paid the remaining amount in a single shot using the Capital First online portal in Aug 2015.

Recently in Feb 2016, I pulled my CIBIL report and found the above account marked as “WRITTEN-OFF” and raised a dispute with CIBIL. I observed in the latest (in May 2016) CIBIL report that the status changed from “WRITTEN-OFF” to “POST(W/O) Settled.” I discussed this with Capital First Customer care many times. They just replied like, “You paid the amount in the stage of WRITTEN-OFF status, so it should be POST(W/O) Settled. It won’t change further.”

Is that true? And how do I remove that status from my CIBIL?*

In this case, it’s very difficult to improve your score because that bad remark will be there for many years/decades unless you clear off the loan.

Get in Touch with Lender

So, if possible, try to get in touch with the lender and speak to them about this. Ask them how you can get a “closed” remark for a loan. At times, lenders are ready to take a lesser amount and update the entry as “Closed” with CIBIL.

Once you follow all these steps and correct your CIBIL mistakes, your CIBIL score will go up over time.