The Credit Information Bureau (India) Ltd (Cibil) maintains the credit history of all borrowers. It provides credit information report to banks and other financial institutions, which includes a borrower’s information and his credit details across different institutions, based on which decisions to grant loans and credit cards are taken.

Let’s consider a case where a person comes to know of an error in the credit report because of which he is rejected a credit card.

The case: Akash misses out on paying a credit card outstanding amount of Rs 5,000 because of oversight and realises this much after the due date. On realisation, he immediately makes the payment along with the required interest and fine. He is under the impression that the bank has updated its records and has informed Cibil as well.

After about two months, he applies for a credit card with another bank and finds to his horror that his request has been rejected. Upon investigation, he finds out from the bank that his Cibil report showed his default payment pending and, hence, rejected his application. The previous bank had not updated Cibil when he paid up.

The solution: Cibil updates credit reports based on the information provided by banks and other credit institutions. Therefore, the delay in getting the credit report updated and the consequent rejection is because of the negligence of the old bank. In this case, Akash can follow the following procedure to rectify the mistakes:

Get the credit information report (CIR): After Akash comes to know that he has been rejected a new card on the grounds of default of payment of old dues, his first action will be to get hold of his credit report. This will be necessary as it will be a proof that the payment he had made was not reflected in CIR.

He can purchase his credit information report and the Cibil TransUnion Score by paying Rs 470. If he wishes to access only the credit report, he will need to pay Rs 154. This can be received via email by submitting an online form available at www.cibil.com and answering some questions to authenticate his identity.

Alternatively, Akash can download the form from Cibil’s website and send it to them along with the KYC documents. If he is making the purchase online, he can view his credit report instantly after making the payment and passing the authentication. On the other hand, if it is done offline, he will receive the report within seven days of receipt and verification of his documents.

Enquire with the old bank: Simultaneously, Akash should enquire the status of the payment with the previous bank. He must keep a copy of his correspondence with the bank and send the same through registered post so that there is proof of receipt of the enquiry. In his enquiry, he must include a copy of the cheque or online payment of the credit card dues as a proof. If he doesn’t receive a reply from the bank, this will further strengthen his complaint.

Dispute resolution with Cibil: Cibil offers the facility to resolve discrepancies in CIR by a simple online process. The dispute request can be raised either for the credit information purchased from Cibil or that obtained from the credit institution.

Fields in the report such as borrower’s information, account type and status, date of opening and closing, current balance and overdue amount, date of last payment, amount sanctioned and asset classification can be disputed.

Further, the ownership of the account and any duplicate account reflected in the report can be disputed. In this case, Akash can raise a dispute request relating to the date of last payment. He can visit the online dispute form by clicking https://www.cibil.com/online/file-consumer-dispute.do and fill up all the relevant details. Control number, which is the unique 9-digit number reflected in the credit report, should be mandatorily filled.

If Akash gets access to his credit information from the new bank, he should obtain the control number from the bank and submit it.

On receipt of the dispute request, Cibil will raise the issue with the respective credit institution for confirmation and make the changes within 30 days.

A dispute request can also be submitted in writing by mailing the form to the Cibil office in Mumbai.

File a consumer complaint against the old bank: If the credit information is purchased within 45 days of making the last payment, it may not be reflected in the report as there is usually a time gap involved. However, in this case, Akash sought to apply for a new card after two months of payment. This is a clear case of negligence on behalf of the bank. Therefore, Akash can file a complaint against the bank with a consumer forum for damages caused because of the delay.

Most banks are willing to avoid public defamation and will agree to a settlement. However, if this is not the case, Akash can file the consumer complaint. He must keep all copies of the payment, correspondence and the credit report, too, when the complaint is filed. However, if he had sought to apply for the new card within 45 days, he must first find out the real cause before filing the complaint.

Apply for the new card: Finally, after the changes in CIR have been reflected, Akash can apply for the new card with the other bank. As the changes will be reflected only after 30 days of raising the dispute, he may have to wait for this period before making the fresh application.

If the above steps do not yield the desired result and borrowers feel that they need assistance or guidance on the way forward, they can approach a credit counselling centre and seek its help to resolve their dilemma.

Besides the credit counselling centres ( see chart), there are individual companies, such as Credit Sudhaar (www.creditsudhaar.com), which offer services to improve one’s credit score to help borrowers apply for a credit card or loan in the future without being rejected.

The author is CEO of BankBazaar.com