Victim of identity theft? Here’s how to fix your credit score

You can now book a movie ticket, book a taxi or buy a plane ticket with just one click. Simplicity, however, comes with its inherent risks, as fraudsters can sometimes impersonate you without your knowledge and even take out a loan in your name. The recent victim of such fraud is Sunny Leone who claimed that his PAN details were used to take out a loan of Rs 2,000 on fintech platform Dhani Stocks Limited. It’s not just Sunny Leone, but a deluge of people have been impacted by the fraudulent use of their PAN by third parties to obtain loans from the company. Dhani Stocks Limited is part of the Indiabulls group.

In cases of identity theft, a person is not even aware that a loan has been taken out in their name. The person usually only becomes aware when the lender starts chasing the repayment or when checking the credit report. That’s why it’s very important to check your credit report regularly, as it highlights not only your past loans, but also your existing loans and credit card dues.

Credit score is a 3-digit number between 300 and 900 points where the score is based on your credit history, which gives an indication to the lender about your ability to repay a loan or credit card charges to the to come up. A good credit score is 750 and above. There are many variables on which the score depends. One of the most important factors is your payment history, which makes up nearly 35% of your total score. All mortgage payments and credit card bills must therefore be paid on time to maintain a good credit rating.

Considering that repayment behavior is an important factor, any default on a loan badly affects your credit score. Therefore, if such a fraud happens to you, the first step should be to rectify it.

“Credit scores can certainly be improved, but there are no shortcuts. The only way to improve your credit score is to have repayment discipline. If your score has been affected by identity theft, the only way is to contact the lender and file your complaint about it. In parallel, you should contact all four credit bureaus and request the removal of the account from your report. The credit bureaus then coordinate with the lender and delete these accounts after confirmation from the lender. Once permanently deleted, it will fix your credit score. If left uncorrected, it will have long-term implications as future lenders will continue to view this as an actual default, which will impact your future borrowing abilities,” says Anurag Sinha, co- Founder & CEO, OneScore & OneCard.

However, the process can take time, because even after contacting the lender to inform them of such fraud, the lender will also take some time to decide if it is really a case of fraud. identity or not. “All the while, non-repayments would have been reported to the affected party, which would have had a significant impact on credit ratings,” Sinha says.

You must therefore take the file with your lender as a priority to resolve the problem.

Read the credit report

Prevention is better than cure. It is therefore important to check your credit report as a regular habit and not just when you want to take out a loan. One of the ways to guard against identity theft is to stay aware of what is included in our credit report.

Sinha says you need to check if any loans or cards mentioned in the report really belong to you and are correctly reflected in your report. In addition, all closings and repayments of your loans are passed on correctly or not.

Checking your credit report regularly is the only way to protect yourself against such fraud. “Such frauds can happen without your knowledge, but the sooner you know about them, the more effective you will be at combating these frauds. It is important to check your credit report regularly, preferably monthly,” says Sinha.

Read also: How the 2022 finance bill will impact personal taxation

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