How to rectify your credit score

June 7, 2022

Want to know how to rectify your credit score? Here is the way out.

The overall process of credit scoring is very transparent and largely automated, but there still might be some errors which can be rectified as and when to avoid any penalty.

A credit score is not just a three-digit score, but it very well determines a borrower’s creditworthiness. Anurag Sinha, Co-founder & CEO of OneScore and OneCard says, “Banks and NBFCs take a serious note of an applicant’s credit score along with other factors to determine one’s eligibility for a particular credit product that one has applied for.”

A lower credit score (<750) means the applicant does not have a good credit history and therefore that might not be elegible from accessing any type of credit. Also, if anybody manages to receive the loan, the interest rates would be generally much higher for such borrowers.

Your bank, lender as well as your credit card issuer, are jointly responsible to submit your repayment history and credit behaviour to the credit bureaus on a monthly or quarterly basis. The credit bureau formulates your credit score out of 900 post receiving of this data and this is then revised on the portal in every 3 months.

Sinha points out, “While the overall process is very transparent and largely automated, there still might be some errors which should be rectified as and when to avoid any penalty. There is a formal process for rectifying one’s credit score.”

Contents

Retrieve and check your Credit Report

There are many platforms / apps available online that offer free credit scores to the users. You can register and download a free credit score report from there. According to experts, once you have the credit report, you should check all the elements details right from your primary name and contact details to any major flaws in transactions or any form of credit discrepancies.

Report the errors to the bureau

Sinha says “every bureau has its dispute resolution mechanism in place and the complaints can be registered through their online portals. Complainants should be duly filled the form and submit it online along with the proofs of your claims.”

Bureau investigation

The bureau will typically contact you within 30-45 days post submitting the details. The bureau will initiate a conversations with you and also the lender/ bank and verify your claims. After all the necessary investigation, the bureau will rectify the error and make necessary corrections.

Sinha explains, “If the users fail to lodge a timely complaint about any discrepancies, their credit score is likely to go down substantially and it may take a very long time and conscious efforts to reverse the same.”

He further adds, “In the meantime, if the users require a credit, it might be extremely difficult for them to avail the same.”

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