Phantom loans hurting your score? Here's the silver lining

Credit report errors and ID theft are rising; here's how to fix your score, claim compensation

- Aprajita Sharma

For this 36-year-old IT professional in Mumbai, the dream of a new home came crashing at the final hurdle. His loan was rejected. The reason was a Rs 6.5 lakh personal loan on his credit report that he had never taken.

The fraudulent entry had tanked his Cibil score from a healthy 780 to a dismal 620, instantly making him ineligible, said Deepak Kumar Jain, founder & CEO, CredManager.in, a loan aggregator platform that was handling his portfolio. He's not alone. A New Delhi-based man was denied a loan over two "settled credit cards" from 2019, despite never owning one. A settled card means the lender closed it after a default, with the customer paying less than the full dues. His case was handled by his relative Gajender Yadav, an architect by profession but having a keen interest in credit cards.

Across India, a growing number of consumers are discovering their financial lives held hostage by errors on their credit reports and identity theft through leaked PAN/Aadhaar data.

Unknown loans don't always mean fraud, said Ankit Bagadia, associate director, BankBazaar. "For instance, Amazon Pay Later is backed by banks/NBFCs, so bureau reports show the lender's name, not Amazon, in case you have taken a buy now pay later loan from Amazon. Borrowers may not even know BNPL shows up in credit reports and that too directly against the lender's name, not the frontline platform."

How to reclaim your credit score Consumers can raise disputes on Cibil's website directly. "We forward the request to concerned credit institutions. Once they verify and update their data, we amend the report," said Bhavesh Jain, MD & CEO of TransUnion Cibil, a leading credit rating agency.