Team-BHP - The Devil in CIBIL (reports)

I learnt about CIBIL the hard way when I applied for a car loan in 2009 through Axis Bank where I'm a priority customer. The bank rejected my application due to poor credit score. I couldn't believe this and some how managed to get my CIBIL control number from the bank. The process to get the control number from CIBIL was a cumbersome one at that time as you had to get DD's, fill out some forms and send them by speed post etc.

Anyway, I was stunned because I had a previous car loan which was repaid and closed. Even during the term of the loan there was just one missed payment, due to a signature mismatch. I had a home loan where I was paying a fairly large packet as EMI for almost 3 years. I had just one active credit card which I've had for over 12 years with moderate usage and no problems, not even one late payment. Now when I was rejected the loan I came to know that I had bad credit score because of two credit cards
1. A nationalized bank credit card which I had closed, but there was an outstanding about of ~Rs. 1000 which was charged for late payment and I had contested this as there was a disagreement on when the cheque was dropped and when it was cleared. So I had paid the amount and refused the late fee and requested for a closure of the card which was accepted by the bank as the card stopped working.
2. Another was free card which was distributed to everyone in my office which I probably used two or three times and realized it was not worth managing so many cards and closed it. There was supposedly Rs. 84 pending on the card which I was not aware when I closed the card.

Now both these banks mark this as bad debts and report to CIBIL which makes me a credit risk! Really???! The lakhs of rupees I repay every year on home loan and other card has no meaning and a measly Rs.1084 is bad debt?!

To get my loan sanctioned, I had to pay that Rs. 1000 and get a letter stating that they are fine with payment and will inform CIBIL accordingly. I was also told that it can take anywhere between 3-5 years for credit scores to improve and even after 4 years since this incident my score has not improved.

Someday I hope have enough money so that if any of these banks approach me for investments, I'm going to reject them saying that they have a bad score in my Bank Worthiness Scoring System!

Quote:

Originally Posted by shivasi (Post 3147043)

kingjulian...
I hope you have got the other Credit Cards blocked. Also, CIBIL gives you the history of all the Credit Cards you ever had including expired, upgraded, lost cards. So I hope the other cards are not your old ones that got expired/blocked and new ones were issued.

shivasi - since the other cards were not mine in the first place, I could go no further than the customer care. I had never had a banking relation with most of the banks whose cards were noted in the report - and as expected of a "non customer" have been receiving the cold shoulder. I have been receiving auto-responses to complaints made through the website whereas customer helplines direct you to the website. Bank branches on their part direct you to the customer helpline. All in all it is a vicious circle and seems the credit card industry is faceless and mysterious.

Also I realise that mentioning the keywords- Banking Ombudsman - in your complaint/mail/conversation seem to shake them up a bit and the response has been better, although begrudgingly.

And as for you earlier post on How do you improve your credit history? - I agree with most of them ; others are simply an overkill for someone who is financially prompt and seem to be based on a fear of CIBIL - a case of the tail wagging the dog.

IMHO, penalizing (in terms of credit score) the closing of a card or someone not having any credit card is contradictory to fundamental rights of freedom.

Quote:

Originally Posted by kingjulian (Post 3144342)

It is 7 years upto which your credit history is maintained whereas the transactions shown in the report itself are for the last 3 years. So if you had opened a loan 6 years back and closed it within a year, this would still appear in your report

Didn't know about that. Probably that was because i do not have too old entries.

@kingjulian
customer care is useless and they dont have an incentive to help you out in this. try writing to their emails. some banks do end up giving mail ids of their top management and as far as i have heard they have a separate team to track those getting those is one part but if you get any then your issue gets resolved asap. one of my friends had a problem with his home loan, repeated running around did not help finally he marked a mail to all top management and then they acted swiftly on this. Hope this helps.

A very well written post kingulian and I could not agree more with you.

The first step to access your credit report on CIBIL website is to pay the money! Ridiculous. They first made me pay up and then gave me totally incorrect questions about banks/loans/credit cards I never had. And I obviously couldn't answer. Right after this ordeal I promptly get a message that they couldn't authenticate me! Now that I have paid up, I have no other option but to follow up with them and send them documents and get the report delivered by snail mail. el cheapo trick guys!

And the so called Exclusive free access to their 'Marketplace' for 6 months is another joke. All interest rates of all loans were significantly higher than what is offered in the market. The Marketplace had vendors looking to find 'victims' rather than customers.

An organization conceived to bring sanity and due diligence wanting to make a quick buck like this is highly deplorable.

Quote:

Originally Posted by veyron_head (Post 3149594)

Hi veyron_head,

To be honest, I access my CIBIL report once every six months just to make sure it is all updated. I have also been always asked 3 different questions every time and they are all actually valid questions regarding actual existing loans. And I have managed to get authenticated each and every time. If all the three questions asked to you were incorrect / inaccurate or do not correspond to ANY of the loans / cards that you have, it is actually a matter of concern.

I would strongly suggest that you follow up with them and ensure that everything is OK. I don't mean to scare you but its better to be safe than sorry right?

Quote:

Originally Posted by evoque (Post 3149618)

THanks Evoque. I did get the report delivered through courier after the above ordeal. The details were all accurate. I have no idea why the questions were totally unrelated to my banking history.

My grouse is with how they want you to pay up without any assurance that they will give you the report at the end of the transaction. Its looks a tad contrived, if you will.

Hey Guys,

I am not sure how many of you know this but i just found out about what may be the first Credit Improvement consultants (in India) who claim they can help with your Credit Score. The website that they have claims to

a. Find your CIBIL score for you
b. Analyse it
c. Give you a detailed report how to fix it and increase the score
d. make you CREDIT Healthy they say...

They even claim that they can help you or any individual to maintain a good score by doing the do`s and don`ts that they say.

Though i just found about it today itself but posting here in case it comes to someone`s rescue. If any one does uses them in present or has, request the fellow member to post his/her experience with them. Same thing applies if someone does go for them...:thumbs up

The website is www.creditmantri.com

Quote:

Originally Posted by bhavtol (Post 3152015)

bhavtol - This is another aspect which I had forgotten to mention. Though I have not personally enlisted their services, the feeling I get is most of these websites are shady scam-types. Credit score ideally can be improved only by maintaining sound financial habits and observing/correcting credit reports. Any third party claiming to "improve credit scores" are just that - claims. I have noted that such websites/agencies tend to exploit loopholes in the CIBIL- Banks relationship and are aware of the mistakes that creep up in the reports. Hence they claim to set right these mistakes by showing up "testimonials", "backend agents at banks and CIBIL" - all a bunch of hokum to trap the gullible. My take is - keep these incorrigible schemes at bay at all costs.
Do note that these companies are not registered at RBI as a financial institution - at best they are/claim to be "partners" with some Non Banking Financial Companies (NBFCs) which are another loony bunch altogether.

Quote:

Originally Posted by kingjulian (Post 3154245)

I agree with Kingjulian that nobody but you can improve your score...but....most of us Indians are either not bothered about it or plain ignorant. For a mindset that has been happy with credit munching these guys (the good ones) offer the valuable do`s and don`ts.

Yesterday, a friend of mine had to settle a credit card debt he didnt use at 1.34 Lacs which was originally only 4 K because he never updated his address or contact info with the card company. When he applied for housing loan with the same bank , he was astonished as with his CIBIL.

The dilemma for him lies in the fact that he dosent know what to do NOW.
Should he settle ? (Which they are offering btw).
Should he pay in full ?
or should he file a legal suit ?

because he believes that if the bank had made serious efforts to contact him they could have. He works with MNC and had paid all his money via Bank transfers. ---- It is at this point that you need financial advise that is best to ones interests and i believe that we will soon see companies (which now are in nascent stage) come to our rescue and save us from getting ripped off. Till then we shall keep getting hampered and not benefited from the Report called CIBIL.
:deadhorse

Hello Friends,

Would like to share some information about the credit report from CIBIL.

A credit report from CIBIL helps Banks and financial institutions to determine your financial behaviour, they use it not only to determine whether to approve a loan but it will also determine what the rate of interest should be. So for example: if two people with the same income apply for a loan, one may get it at a lower rate than the other depending on the financial history and credit score.

Interestingly, These credit bureau's have defined certain dispute codes (about 30 dispute codes). Also importantly, if anyone sends them a correspondence disputing any erroneous entry in their credit report, the credit bureau has to verify the accuracy of that entry within a stipulated time ( 45 to 60 days) and if they are unable to do it within the stipulated time period, they will have to delete that particular transaction entry from the credit report.

There are some companies formed whose business model is thriving on knowledge of these dispute codes. Lets call them called credit clinics (Bad guys). They will send written correspondence to the credit bureau on your behalf and try to register a flase dispute, using their knowledge of the dispute codes, they will register the dispute as confusingly as possible. For example : for a particular transaction on your report. the dispute will be raised to something like - "This account is not mine, i have never paid late and this account belongs to my brother and is paid in full and closed. " hoping that the credit bureau and banks will be unable to verify the accuracy and finally will have to delete them.

Let me tell you, while this has worked in the past. I would not recommend this route to anyone. This is unethical. Secondly there is every chance of exploitation by the so called credit clinic firms themselves.

The best way to improve your credit score is to apply for a short term small amount loan from your local bank and repay that on time. This is an sure way of improving your credit score.

If you have any long due credit card outstanding, that will haunt you for a longtime. Banks write off their bad debts in 7 years, so if you are lucky it will not show up after that. But if possible, I would recommend settling the account with the lending bank. If pursued correctly, they will accept your settlement and close the account. Any money is better than writing of as bad debts.

Please note no credit history is not necessarily better than bad credit history. The entire objective is to analyze your financial behaviour by studying your financial history.

Hope this helps,

All the best guys, cheers