Fix Credit Score: How do you Repair Your Faulty Credit Report?

repair your faulty credit report
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A flawed credit report can hinder your chances of obtaining new credit and might result in your credit applications being denied. It’s crucial to regularly monitor your credit report for inaccuracies or signs of fraud, as such issues can lead to a decreased credit score. Neglecting to address even small errors over an extended period can severely affect your credit score, potentially reducing your likelihood of securing credit or loan approvals.

Why Credit Report Repair Matters?

Credit report repair matters because it significantly impacts your financial opportunities. Inaccurate information on your report can lower your credit score, making it harder to get loans like personal loans, or home loans. By fixing errors and addressing outdated info, you can improve your credit score and unlock better interest rates, lower security deposits, and access to financial products. It’s like cleaning up your financial reputation for a brighter future.

Repairing a faulty credit report involves several steps. Firstly, you need to get a copy of your credit report from each of the three leading credit bureaus. Thoroughly examine each report for any mistakes or discrepancies. Work on any incorrect information with the credit bureaus and provide supporting documentation. Additionally, make sure to pay bills on time, keep credit card balances low, and avoid opening new credit accounts.

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Common Types of Credit Report Errors

If you are looking to avail a personal loan then you should be aware of the common credit report errors that can block your financial prospects. Go through the section below to learn about the common types of credit report errors:

Identity errors

    1. Mistakes in your identity information, such as name, address, contact details, etc.
    2. Mixing your accounts with another person with the same or a similar name.

Account errors

    1. Open accounts reported as closed or vice versa
    2. You are reported as the owner of the account when you are just an authorised user
    3. Accounts that are reported as delinquent or late despite timely payments
    4. Incorrect date of date opened, date of last payment, or date of first delinquency

Balance errors

    1. Accounts listed with the incorrect current balance
    2. Accounts listed with an incorrect credit limit

Duplication Errors

    1. The same debt listed more than once, possibly under different names or creditors

Fraudulent accounts or transactions

    1. Unknown accounts in your name
    2. Unknown transactions in your name

Fixing Errors in Your Credit Report

Obtain Your Credit Report

You’re entitled to a free credit report from each major credit bureau (Experian, Equifax, Transunion) every week to identify any errors. Head to AnnualCreditReport.com for a secure way to access all three reports in one place. This is a valuable tool to monitor your credit health and catch mistakes early on.

Review Reports Carefully

Examine each report for any discrepancies. Look for incorrect personal information, accounts you don’t recognise, inaccurate balances, or late payments that shouldn’t be listed. Early detection and correction of these errors can significantly improve your credit score.

File a Dispute

If you discover errors, act swiftly to file a dispute with the credit reporting bureau that issued the report. Most bureaus offer user-friendly online dispute forms on their websites to streamline the process. Be sure to gather supporting documentation to strengthen your case.

Also, read: Smart ways to improve CIBIL Score

Credit Score Improvement Strategies

Make Timely Payments

This is the single most important factor impacting your credit score. Develop a system to ensure all bills, including credit cards, loans, and utilities, are paid in full and by the due date. Consider setting up automatic payments or reminders to avoid late payments, which can have a serious negative impact on your creditworthiness.

Maintain a Low Credit Utilisation Ratio

This ratio, known as the credit utilization ratio, indicates the portion of your available credit limit that you are currently using. A low ratio signifies that you effectively manage your credit and use it responsibly. Experts recommend aiming for a utilisation rate below 30%. For instance, if your credit card limit is ₹10,000, strive to keep your balance below ₹3,000. Strategically paying down balances and avoiding maxing out your credit cards will contribute to a healthier credit score.

Consider Credit Counselling

If you’re struggling to manage debt, credit counselling can be a valuable resource. Credit counsellors are trained professionals who can help you develop a personalised debt repayment plan, negotiate with creditors for lower interest rates or more favourable terms, and provide guidance on budgeting and financial management. This tailored approach can help you get back on track and improve your credit score.

Also, read: How to check and remove your name from CIBIL’s Defaulter List?

FAQs

1. Can credit score repair agencies help improve my credit score?
Yes, you can repair your credit score with the PayMe Credit Assist feature where you get a personalised solution.
2. What if I don’t have a credit history? How can I build credit?
You can build a credit score by timely payment of credit card bills, home loan EMIs etc.
3. I’ve heard about credit monitoring services. Are they worth it?
Yes. Credit monitoring services are worth it for the insight they offer regarding a customer’s credit health.

 

 

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