“Abused” credit score: how to fix this key metric

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Several cases have recently come to light of criminals allegedly using other people’s permanent account number and other documents to avail loans without the knowledge of clients of fintech companies and NBFCs. As many of these loans have not been repaid, this has affected the credit rating of a number of borrowers without them having actually taken them out and defaulted. Specific cases have been reported for Dhani Loans and Services, formerly known as Indiabulls Consumer Finance Ltd.
A deterioration in credit rating and default on existing loans can have adverse consequences such as the denial of future credit or the availability of credit at rates much higher than market interest rates.

How to correct the credit score?

A customer can check their credit score and whether a loan (which has not been taken out) is outstanding through reports provided by the respective credit bureaus. These reports can be obtained by logging on to CIBIL, Equifax or Experian or by accessing its bank through an online banking facility.

Experts say the easiest way to rectify the recent cases would be through an institutional process initiated by the Reserve Bank of India (RBI). Data subjects can also approach the information provider and offices directly, although this should be a cumbersome process.

“This rectification process should be case specific…if the CIBIL score has been misrepresented, the client should contact the specific institution where their security was compromised. The loan provider, who is also the information provider, will have to contact CIBIL to put the clients’ score in order. In addition, aggrieved parties should also contact CIBIL and initiate a dispute request online or by writing to them,” said Surya Bhatia, Certified Financial Planner. by financial industry experts is for the RBI to step in to provide relief to aggrieved customers.

Where to go if the problem is still not solved?

The RBI’s built-in ombudsman scheme provides free redress for customer complaints of service deficiency by banks, NBFCs and payment system operators.

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