Summary of this article
Check your credit report for repayment errors
Contact the lender with supporting documents
Raise an online dispute if needed
Finishing off all the repayments towards a loan does not always mean that the account will immediately appear as closed. Lenders and credit information companies can sometimes take time to update records on their end.
In many cases, errors may occur. Like an incorrect balance, overdue amount, or repayment status due. Such inaccuracies can affect the credit profile and may create problems when one applies for a new loan or credit card. If you have fully repaid a loan but your credit report still shows incorrect information, here is how you can get it corrected.
Find the Error
For borrowers who have recently paid off the entirety of their loan, they should start off by obtaining their latest credit report and reviewing their loan account. They should also check whether the account is marked as closed, if the outstanding balance has been updated to zero and whether any overdue amount or missed payment is reported inaccurately. One should also check the loan account number, date of closure, and repayment history and keep proof of the same. Keep supporting documents such as the loan closure letter, no-dues certificate, repayment receipts, and bank statements. These can help establish that the loan was repaid in full.
“Finding an error on your credit report after paying off a loan is frustrating. Your paid loan might still show as active, or worse, display a false late payment. You can fix this fast by getting your report, contacting the lender directly with proof, and raising an online dispute,” says CA Sahdev Singh Tomar, Founder, Tomar & Associates.
Contact the Lender Directly
While making the changes, if you find any errors, contact the bank or the financial institution that reported the information. The lender is responsible for providing accurate account information to the credit bureau. So, asking the lender to verify and correct the data can be an important first step. Raise questions about the dispute and attach the relevant proof of payment and closure. Explain what information is incorrect. Keep all records and copies of proof, complaint and any corresponding document.
If the information remains incorrect, the borrower can raise a dispute with the credit bureau through its online dispute resolution facility. Select the dispute you wish to resolve and provide the information you want corrected. The credit bureau can then refer the information to the lender for verification.
Keeping the documented proof here becomes necessary, as credit bureaus cannot independently change the information without verification by the lender. Once the dispute is processed, check the updated credit report to confirm that the correction has been made. By regularly checking credit reports, you can ensure that your repayment history reflects accurate information.
