November 27, 2024 · 11 mins read
Santosh Kumar
CIBIL (Credit Information Bureau India Ltd.) is a company that maintains all credit-related information of individuals and organizations. Banks and other financial institutions submit credit information to the bureau, after which CIBIL issues a credit report and assigns a credit score, aka a CIBIL score.
The CIBIL Score is a three-digit number that ranges between 300 and 900. It indicates a person's creditworthiness. The higher the score, the better the chances of getting loans approved, along with better deals and interest rates.
The CIBIL score is vital for determining creditworthiness so that the lender can assess the risk of payment default. A high score indicates that the borrower has a good repayment history, while a low score suggests risky behaviour.
A CIBIL report provides detailed information, including credit history, personal information, loan accounts, credit card information and other information for the past 36 months. The CIBIL score is taken from the CIBIL report to provide a number that depicts the creditworthiness of a person. It is necessary to understand the crucial importance of the CIBIL report and CIBIL score as it is a significant aspect of evaluating loan eligibility. Maintaining a high CIBIL score ensures safety during unexpected financial requirements because a good score can ensure there is available and accessible credit.
1. CIBIL Score: The CIBIL score is based on information derived from credit behaviour. It must be above 700.
2. Personal information: This section includes all personal information about the borrower, such as name, date of birth, gender, identification number, etc.
3. Contact Information: contact information like phone numbers and addresses is provided under this section.
4. Employment information: income details of the person, whether monthly or annual, as reported by financial institutions, is mentioned in this section
5. Account Information: This section contains all credit-related information, such as lenders' names, credit types, ownership details, loan amounts, and payment details.
6. Enquiry Information: Whenever enquiries are made during credit application, the system records them in the credit history.
A CIBIL dispute is a complaint a company or individual raises when they find an error in the information on the credit report. The mistakes or errors may affect the creditworthiness of the borrowers as it is based on an inaccurate interpretation which negatively impacts loan approvals in the future as well. There are 2 broad categories of CIBIL disputes:
1. Individual CIBIL disputes
2. Company CIBIL disputes
There are a number of factors affected by an error in the credit report:
1. Low credit score
2. High interest rates
3. Rejection or delay in loan approval
4. Negative impact on credit history
5. Increased financial stress
Read More:: How to Apply for Student Credit Card
Most individuals dispute an error in personal details or a case of duplicate accounts like an incorrect company name, wrong PAN card details, etc. Individuals with credit report inaccuracy who raise a dispute have to produce supporting documents like bank statements, payment receipts, etc., to verify the correct information. The CIBIL will then investigate the complaint and correct the errors. Correct information in credit reports is crucial in maintaining a good CIBIL score which affects the creditworthiness of an individual. Credit reports must be checked regularly for errors and must be fixed as soon as possible.
Companies face errors like ownership errors, duplicate account details, etc. When noticed by the company, these mistakes file a complaint with CIBIL. These errors will not accurately interpret the company's creditworthiness, which negatively impacts future partnerships and loan approvals. A company's credit history must be accurately reflected in their credit report which will increase the chances of getting positive business opportunities in the long term.
Some other minor types of dispute that arise with CIBIL are:
1. Personal details: disputes involve personal information like incorrect names, addresses, or contact numbers, which may seem minor but can have a huge impact on creditworthiness.
2. Account status disputes: accounts may appear as ‘closed’ when that is not the case. Individuals or companies must correct such errors as soon as possible to prevent adverse effects on the credit score.
3. Ownership status disputes: discrepancies in account ownership will adversely affect creditworthiness, which is why it is crucial to correct such errors and ensure an accurate representation of financial history.
4. Credit enquiries dispute: Unauthorized credit inquiries on a report can negatively impact a credit score. It is important to correct these mistakes as soon as possible.
Read More:: What is Experian Credit Score and How It Affects You
A dispute is raised when there is an inaccuracy in the CIBIL report. Individuals or companies raise a dispute through the online dispute form under the Consumer Dispute Resolution after registration in the CIBIL member account. Here is how to raise a CIBIL dispute:
Step 1: Register and log in to the CIBIL portal, where the person's CIBIL score and report are displayed, to ensure the report is updated.
Step 2: Find and select the 'credit reports' section, then go to 'dispute centre' and select 'dispute an item'
Step 3: Fill out the CIBIL online resolution form with the necessary details and bank account information. Multiple dispute requests can be raised at a time.
Step 4: Select the dispute section, enter the correct data if applicable, and submit the dispute form. After that, a dispute ID is given, with which it is easy to check the CIBIL dispute status.
The online method is the easiest and fastest way to raise a dispute. However, a dispute can also be raised offline by sending a letter to TransUnion CIBIL Ltd. More information on how to raise a CIBIL dispute and the dispute resolution process is given below.
Read More:: Is 772 a Good CIBIL Score?
After the CIBIL dispute is raised, errors are inspected and marked as 'under dispute,' after which CIBIL rectifies the errors with the lender. The status of the CIBIL dispute is updated via email every seven days, and an SMS is sent after the corrections have been made.
During this process, it is important to note that CIBIL does not make any changes in the report. Necessary changes are made only after the authorization of the concerned financial institution. It is best to resolve matters internally as the resolution may take up to 30 working days.
If the dispute is rejected or the resolution is dissatisfactory, it is advised to contact the concerned lender and initiate another dispute request.
There is no direct effect on the CIBIL score when a dispute is raised. During the dispute resolution process, the impact may not necessarily be reflected on the CIBIL score but can delay the updates to the score. There could be an increase in the CIBIL score if the resolution was in favour and the errors negatively impacted the score. However, there can be temporary hold-off from lenders during loan approvals if there is a dispute resolution in process until it is resolved. Unresolved errors in the credit report for too long can hinder the increase in credit score.
Read More:: Is 776 a Good CIBIL Score?
It is vital to take preventive measures that help avoid errors in the CIBIL report. Some tips to ensure the accuracy of the report and avoid mistakes are:
1. Monitor regularly: regularly check the CIBIL report at least once a year to correct any errors.
2. Update personal information: ensure all personal details, like name, address, etc, are the same across all accounts and documents.
3. Make on-time payments: delayed payments or missed payments can lower the credit score.
4. Avoid multiple loan applications: Lenders make inquiries every time a loan application is submitted, which can negatively impact the credit score.
Read More:: What is CMR Rating in CIBIL?
Credit reports or CIBIL reports can be monitored by checking credit scores regularly and doing soft checks so that the score does not get affected. Credit reports must be checked every three months for errors. In case of errors they should be reported immediately, or else they may have a negative impact on the score. This ensures safety and security against fraud, identity theft, etc.
Some benefits of monitoring credit are:
1. Prevents identity theft: regularly checking the credit report will safeguard from potential theft, and prompt action will avoid any financial loss
2. Maintaining and controlling finances: Tracking all financial activities will ensure safety and efficient financial planning, which will be beneficial in the future.
3. Monitors credit inquiries: monitoring helps maintain a strong financial profile, which increases the chances of better interest rates and faster loan approvals
4. Warns about frauds and scams: unauthorized accounts or inquiries made can result in a financial loss. Regularly monitoring credit can ensure safety and help identify potential scams and frauds to take immediate action against them. Early error detection can help address the issue before there is a major loss or negative impact on the credit.
Read More:: Reasons For Loan Rejection Despite Good CIBIL Score
1. Get a copy of the credit report from CIBIL to identify any errors that need to be fixed and fix them as soon as possible.
2. Gather all necessary documents to support the case, like loan repayment receipts, settlement letters, etc., to prove the inaccuracy in the report
3. Ensure there are copies of all submitted documents and keep a record of any communication with CIBIL to help track the progress of the dispute resolution and its status.
4. The resolution process may take time. If there is no response within a specified time frame, follow up with CIBIL to find out the CIBIL dispute status.
5. Maintaining accurate financial records is important to help identify potential errors or discrepancies.
6. Maintain regular contact with the credit bureau throughout the dispute resolution process and respond to their inquiries promptly to provide any information required by them.
7. It is important to monitor the credit report regularly, even after the dispute resolution, to identify potential errors beforehand and take action if needed.
It is important to remember that every dispute is unique, and its outcome varies. The above tips will ensure effective dispute resolution and help maintain an accurate credit report.
Read More:: Benefits of Good Cibil Score
How to raise a CIBIL dispute in CIBIL is a common query but an easy task. Raising a dispute with CIBIL is a crucial but systematic process for maintaining a good credit report and history. It improves the chances of accessing credit when required. Individuals or companies must regularly check credit reports ide, notify errors reg, file a complaint as soon as possible, and monitor the status of the dispute to ensure the dispute is resolved within time. When raising a dispute, it is important to provide supporting documents and maintain clear communication with CIBIL to improve the chances of a favourable resolution. Successful resolution on time may increase the credit score creditworthiness for faster loan approvals and reasonable interest rates. It helps maintain a good score, which ensures a strong financial profile. Raising a CIBIL dispute ensures the errors are fixed on time and increases creditworthiness for easy loan approvals.
How to check the Dispute status in CIBIL?
Dispute status can be checked by logging into the CIBIL portal and entering the 'Dispute Status' section. Alternatively, CIBIL sends an email notification regarding the status of the dispute.
What is the duration in which CIBIL resolves a dispute?
Usually CIBIL takes around 30 working days to resolve a CIBIL dispute.
What does CIBIL do after I have raised a dispute?
CIBIL sorts out and inspects all the errors, marks them as 'under dispute', and then rectifies the errors with the lender.
What to do if I am not satisfied with resolving the dispute?
A new dispute can be raised with the details of the previous request in case you are not satisfied with the dispute resolution
Does raising a dispute affect my CIBIL score?
There is no negative effect on the CIBIL score when a dispute is raised. However, when the errors are rectified, there can be a change in the score accordingly.
Download the app now
Download the app from PlayStore
