Credit report errors: Experts explain common mistakes that hurt your credit score and how to fix them

A weak credit profile and a low credit score are often associated with missed payments, missed due dates or poor financial habits. However, errors in credit reports can also affect a borrower’s profile.

Errors such as incorrect repayment status, outdated loan information, duplicate accounts, or inaccuracies in personal information can create an inaccurate picture of an individual’s borrowing history and creditworthiness.

Kaushik Chatterjee, Founder & CEO, lendingplate, says, “People often assume that a low credit score is always the result of missed payments or poor financial habits, but that is not necessarily the case. Mistakes in a credit report, such as an incorrect repayment status, a duplicate account or outdated loan information, can also affect a borrower’s profile. Hence, checking your credit report regularly and flagging any discrepancies early is important. A little attention can go a long way in keeping your credit history accurate.”

Credit reports bring together information from multiple sources and reflect borrowing relationships. Even a minor, harmless-looking mismatch can warrant a drop in score and require attention. This makes it vital for borrowers to review and correct common mistakes on their credit reports.

Shakti Shekhawat, Business Head, BharatLoan, says, "Credit reports bring together information from multiple borrowing relationships, so even a small reporting mismatch can sometimes create confusion for consumers. Changes in personal details, duplicate reporting, an account not being updated after closure or an incorrectly recorded repayment can all warrant a closer look. Borrowers should not assume that every discrepancy is permanent. Reviewing their report and understanding the source of an entry is the first step towards keeping their credit record accurate."

The signs of credit report errors are generally easy to catch. They can include, for example, a sudden change in credit score, incorrect balance reflections or unusual or incorrect entries in credit profiles.

If such an error is identified, borrowers should raise a dispute through proper channels with the relevant lending institutions or credit bureaus.

Kuldeep Yadhuvanshi, Business Head, Rupee112, shares, "Consumers often look at their credit score as a single number, but the more important question is what is driving that number. A sudden change should encourage borrowers to look at the underlying report for unusual enquiries, incorrect balances or repayment information. Understanding the reason behind a change can help borrowers distinguish between an actual credit issue and a reporting error , and take the right action accordingly."

Regularly reviewing credit reports and promptly addressing any discrepancies can help borrowers maintain an accurate credit history.

Shivam writes on personal finance, equity markets, and mutual funds. He has previously contributed to several leading publications, including Moneycontrol. He can be reached at [email protected]

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