If you've kept up with the news, you've probably heard enough about identity theft over the years, to know that it doesn't happen to smart people like you. It happens to people who don't understand technology, and those who give away their pin numbers to random people on the phone. But then, it happened to not one, but two well known celebrities - both of whom understand technology, and are cautious about their personal information (they are celebrities after all!) Yet, in both cases, someone managed to use the celebrity's PAN details to avail themselves of a loan. In both cases, the loans were defaulted on, and the credit score of the unsuspecting celebrity took a beating.
The loan providers were inundated with tweets from other people who had had similar problems, but hadn't gotten the quick resolution that the celebrities had. How did this happen? Why were the providers issuing loans without proper due diligence? That remains to be seen, and fixed. In the meantime, those who found out about their "bad credit score" by applying for a loan, are dealing with unnecessary delays while the providers sort it out with the credit bureaus.
Imagine applying for a loan you desperately need, and being rejected because you have a paltry sum of Rs 2000 outstanding somewhere. You look closer, and realise that it isn't even your own loan! Frightening? Yes. Avoidable? Completely. Just check your credit report, each month. That's it.
If you’re like most people, you probably don’t think about your credit report unless you’re applying for a credit card or loan. Even if you're hearing the terms 'credit score' and 'credit report' for the first time, don't worry. We've got you covered.
What is a Credit Report?
A credit report comprises financial information that credit bureaus compile on each and every one of us, provided we've availed a credit card or any sort of loan product. It includes our payment histories (do we pay our bills on time, do we pay them in full, etc), the types of credit we've availed (credit cards, home loans, personal loans, etc), how much credit we've availed and for how long. You can think of it as your profile as a borrower. It tells banks, credit card companies, insurance providers, etc what sort of borrower you are, and what kind of repayment behaviour they can expect (based on how you've managed your finances in the past).
Checking your credit report is quite easy - each of the four credit bureaus that operate in India allows you to apply for your credit report via their website. However, the easiest way to get your credit report is via the OneScore App. Not only does the OneScore app show you your credit scores from two credit bureaus (Experian and CIBIL), it also gives you detailed credit reports from both. Additionally, it provides AI driven custom recommendations for actions you can take to improve your credit score. Best of all: the app does this for free, and with No Ads, No Spam.
So why should you check your credit report regularly?
For starters, to safeguard yourself from identity theft. Personally Identifiable Information (name, PAN number, driver's licence or other govt IDs) can be misused to conduct financial transactions or get financial benefits in your name - like it was for the celebrities. Reviewing your credit report every month will flag any unexplained inquiries or loans/credit cards that are fraudulently obtained in your name by stealing your identity. Ditto strange loan and credit card accounts that you don't recognise. These can be immediately highlighted to the credit bureaus for correction and keep you safe from identity thieves.
Another reason is to keep your information clean and consistent. A spelling mistake can cause someone else’s unpaid debt to show up in your records. For example, think about how many Rahul Singhs and Rohit Sharmas there are in India. You don't want to carry someone else's financial mistakes! Checking your credit report regularly and reporting mistakes to the credit bureau can save you a great deal of trouble.
And finally, it helps you stay updated on your creditworthiness. Knowing the effect of your actions on your credit score month on month gives you the necessary feedback you need to manage your credit score effectively. You always know where you stand before you apply for loans. Moreover, it helps you make the most of your credit products: by improving your credit score before you apply for credit, you qualify for better rates!
What do you need to check in the report?
Credit bureau reports provide various details on your credit accounts across all lenders: personal details such as PAN number, phone numbers, address and email IDs; and account level information such as account open dates, close date, payment history, loan amount, etc.
It's critical that you keep an eye on these details and make sure that all of it is correct - any inconsistencies in your personal information opens you up to identity theft, as previously explained. Any inconsistencies in your account level information makes your credit score inaccurate. The OneScore app makes reporting these errors easy - simply raise a dispute with the respective bureau on the app and track its status.
If you see credit enquiries in your report and you haven't applied for new credit, you know someone is likely attempting identity theft, and you can report this to the relevant authorities.How often should I check?
It is completely up to you. However, a monthly review should be sufficient enough to keep you informed about any changes that might reflect in your credit report and affect your credit score. You can check your credit score and credit report for free with monthly updates on the OneScore app. Just remember to ask yourself and your loved ones #ScoreDekhaKya to keep yourselves safe from identity theft.
For more articles, information and tips, visit our page #ScoreDekhaKya.Moneycontrol journalists were not involved in the creation of the article.