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,” he added.
How to reclaim your credit score
Consumers can raise disputes directly on Cibil’s website. “We forward the request to the concerned credit institution. Once they verify and update their data, we amend the report,” he explained.
This will reflect in your Cibil report the next time you access it post this data update by the respective bank.
Consumers should also follow up with lenders to speed things up. “Effective January 2025, credit institutions have been directed to share data with us fortnightly. The report is rectified only after they update their records,” Jain added.
In case of identity theft, where your PAN has been used by someone else, file a police complaint and FIR first, inform the lender’s fraud investigation team with a written complaint stating the loan does not belong to your name and submit the FIR copy.
“Simultaneously, raise a complaint with credit rating agencies as a fraud alert stating all facts with the concerned fraudulent loan,” said Jain of CredManager.in.
“We followed the process and chased the crime investigating agency, lender and credit rating agency. Once the lender confirmed the fraudulent loan post investigation, they withdrew the loan and intimated the credit rating agency and ultimately the loan record was removed from the client’s credit report,” he said.
It took Jain’s client up to three months before the fraudulent loan was deleted from his credit report. His score recovered to 765.
New Delhi-based Yadav, whose relative was denied a loan over two “settled credit cards”, contacted banks and sought data on credit cards issued in his relative’s name and a PAN card. If lenders fail to resolve a query within 30 days, the customer can contact the RBI ombudsman.
“Banks were taking their own sweet time. We escalated the matter with the RBI ombudsman. It took three months of follow-ups, but finally, both cards were removed from his report… Till date, we have no idea how those cards were issued on his PAN for someone else,” he said.
Sebi-registered investment adviser Abhishek Kumar had, in 2009, three overdue loans appearing against his PAN. These were due to another “Abhishek” with the same date of birth. “The banks confirmed it was tied to a different PAN. Once I shared this proof, Cibil corrected the report, and my loan was approved,” he recalled.
What about compensation?
Jain of Cibil pointed out that under regulatory rules, if a credit report error isn’t addressed within 30 days, consumers are entitled to compensation of ₹100 per day of delay by the entity causing such delay, until resolution.
However, don’t assume the compensation is automatic. You may have to ask for it. Notably, neither Jain’s client nor Yadav’s relative received compensation despite delays beyond 30 days.
Bagadia of BankBazaar said he received compensation twice. “In my case, a car loan was incorrectly marked as standard (denoted as “S”). When I raised a query, I found that ‘S’ actually meant fully paid on time. The correction came 11 days past the 30-day window, and I was paid ₹1,100. Later, when updating my address and email took more than 30 days, I was compensated again,” he said.
Bagadia added that once a dispute is resolved, Cibil provides an updated, corrected report free of cost.
How to safeguard your data
In a digital age where data theft is a common concern, you must be cautious when sharing your documents with anyone, whether regulated or unregulated entities.
“If you share copies of PAN, Aadhaar, write the purpose neatly on the document along with the date. Don’t just give it with your signature. This will prevent unauthorised use,” said Samit Singh, an ex-banker and now founder of Happy Retirement, a financial planning firm.
“Limit the usage of Aadhaar and PAN until it is required mandatorily because of statutory requirements. If you have to use it, use masked Aadhaar (last 4 digits available) as much as possible,” suggested Jain of CredManager.in.
Don’t wait until a loan rejection to check your score. “All four rating agencies offer it for free once a year. That is how you can check it on a quarterly basis,” suggests Kumar. Though Experian, Equifax, and CRIF High Mark are also in the business, Cibil is more widely used to assess one’s credit score.
Consider subscriptions. “It will cost you around ₹900-1200 per annum for premium subscriptions. Cheaper options are available, too,” Bagadia said.
Should you check free credit reports on Google Pay, Amazon Pay or other aggregator platforms? Jain of Cibil says it’s allowed under the Credit Information Companies (Regulation) Act, 2005, which permits certain fintechs to fetch scores on behalf of consumers.
“It is advisable to always check your Cibil score on an authenticated and safe platform and avoid using unverified platforms. Otherwise, it’s safer to fetch reports directly from credit bureaus,” he advised.
Verifying the credibility of a platform before disclosing sensitive financial details is crucial to safeguard your credit information, he added.