How Will Identity Theft Affect My Credit Score

Sneha, a well-settled entrepreneur, at 31 is well settled in Pune. She owns a house, two cars and few properties. These are solely her properties. She stays with a small family of 3, She, her Husband and a Daughter. She has put in a lot of efforts, in building the empire of her business and the properties she owes. She is a regular checker of her credit score and has made no defaults of any loan she had taken or any loan she has today. She has never made any late payments of any of the credit cards she peruses. Her credit score and credit report, both are in place.

A free CIBIL report is given every year by the bureau as per RBI regulations and she has taken well advantage of it. Now, she is planning for a business expansion. She goes to a bank and applies for a business loan. She is very well aware that a business loan is the unsecured – installment based loan. But with the past records and the payment history she has maintained, she is confident enough that her loan will get approved. While the finalization of the process, her loan was rejected. As she is a very old client, the bank manager explained to her that there is the cibil score goof up, and it has gone tremendously down in last 3 months. With looking in details, they came to a conclusion that it was a case of identity theft.

Let’s understand in detail, that what is identity theft. In this digital ear, everything is available online. There a few people who can hack into your systems and fetch the important and very sensitive and confidential data which then they use to make the theft. So, they will use your name, number, credit cards, aadahar card number and take a credit. Or the may make many multiple online transactions using this. Not only the hackers can do that, but if by mistake you have shared your confidential information somewhere, and it was meant to be destroyd but was not destroyed by any of the reason, some very over smart individual, will steal your identity and make the use of it.

What happens in such cases? When any of this occurs, it becomes an identity theft where the credit transaction is done from your account but not by you. You come to know about it when either you check your credit report in detail by yourself or if you have applied for a credit and it got rejected due to this reason. Let us now see, how can identity theft affect the credit score.

  1. Sudden dip in score

If in the month of May you checked your free cibil score, and it was 783. now just as an example mentioned above, you applied for some loan and it got rejected. Now when you investigate, you came to know that your score is 620. There is the sudden dip of 163 points in your score. While seeing the report minutely, you come to know that there are many transactions which are not made by you and a few credits which you have not applied for! Terror number one.

  1. Rejections in loans or credit cards.

As there is a sudden dip in the score, the credits or the loans you must have applied for, which are in pipeline will get rejected.

  1. Longer run effects

The negative flags, stay on your report for much longer time. Nearly a decade. Now, since you have not made payment by yourself, why would you pay the same? Makes sense, so in those cases, you would need to raise the dispute so that it can get off your report in the meanwhile.

  1. Fear always

Since once this has happened, you will always be scared to share your confidential information even to those whom you would actually have to share in case of taking credits or any important things.

Always make sure while applying for credit cards or any loans, do not share each and every detail with everyone. Also, whenever you share the important documents write the propose of in on the photo copied document in order to not get it stolen. While sending these details, be cautious. If possible send it in encrypted form or try not sending it online. Stay alert and stay accurate & updated. Do not neglect thing which can affect your score!

Advertisements

Why You Need to Check Your Credit Report Regularly?

Keeping a check on your credit report is as essential for your financial health as is annual health check-up for your medical wellbeing! Indeed this is very important for managing your personal finances coherently.

When you keep tabs on your CIBIL report, you basically keep tabs on your expenses. You get a snapshot of your financial worth in the form of credit rating and credit score, besides finding out vital financial details such as outstanding account balance, pending credit accounts, credit cards, loans and other bills. This brings out a clear picture of your financial obligations to you. This helps you clearly know your current outstanding and you can accordingly plan for future credit.

You should always check credit report online several times in a year. When you do review the report regularly, you can be rest assured that your report has all the accurate facts and information. There is no discrepancy whatsoever. This saves you from perils of “identity theft” and “raising dispute to improve the score”.

Identity Theft

This is a hideous financial crime against you. You should always be cautious if you spot an unidentified activity or bank query made on your report. In an identity threat someone can use your personal credentials to raise the credit. They may get the loan approved and enjoy the credit while you would be the one who will be liable to pay the dues. If you fail to pay the dues, your credit score will reach bottom soon.

Thus you should always be very careful when you share your personal information with any one. Keeping a check on your credit report helps you identify any nuisance if at all imposed on your name in the credit report.

Identify Disputes

Sometimes your scores fall due to mistakes on your report. Herein you need to raise dispute with concerned authorities and get the correction made as soon as possible so as to improve the score. The sooner the correction is made, the better it is for your credit score. Thus it is very important to keep a check on your report so that any kind of reporting mistake, missed update, or wrong information on your report do not ruin the score for long. As soon as you identify the error, you would get it corrected within 30 days.

There are other benefits of studying credit report as well.

When you regularly monitor credit report you can make sure that your credit score is always positive. With better score you get the confidence for enjoying credit freedom in future as well. That is why your credit score determines your credit freedom. As you are aware of your financial freedom you can confidently contact lenders for the credit and that too, at lower interest rates!

However, if you are looking out to find a loan for low credit score, you again need to monitor your report. By monitoring report, you can correct the bad points in the report and make progress towards credit in future. Checking reports always help you evade bad history and ensure the loan availability whenever desired.

If you do understand your credit report, you can certainly be confident of handling all the disputes yourself, without a professional help. It comes really handy when you want to try different ways to improve credit score yourself. Thus, every person who has a credit history should know how to check free CIBIL report online. One can log on to freescoreindia.com to avail free credit score.

Your report has relevant data about you. It comprises of your loan and credit card repayment details, credit ratio usage, available credit details and every other information about your credit functions. So by monitoring the report you get freedom to analyse your financial obligations whenever you want. This helps you keep track of all due amounts for different kinds of loans and credit cards and take steps to not miss a payment. You can successfully exercise financial discipline by studying your report frequently.

After all, checking credit report is free and you can do so as and when you want. It does not have any negative impact on your rating. Thus always stay informed by checking the report and keep your scores intact.