Banks become instantly alert when they spot these 4 errors in a credit report, and some even reject loan applications altogether..

In today's world, every loan application process hinges on your credit score. Whether it's a home loan, personal loan, or credit card, banks make their decisions based directly on your credit report. These reports are prepared by agencies like CIBIL, Experian, Equifax, and CRIF High Mark. Even a single error in this report can lower your score, increase your EMI payments, or even lead to loan rejection. Let's look at four common errors that can cause lenders to reject your loan application.

1. Incorrect Personal Information
Sometimes, errors occur in the spelling of your name, your old address, the incorrect PAN number, or the date of birth in the report. This can lead to your profile being matched with someone else's records. As a result, someone else's entries might be added to your name. This can cause unwanted fluctuations in your score, and the loan may be rejected due to a KYC mismatch.

2. Timely EMI Payments Shown as Late
This is the most common mistake. You paid your EMI on time, but the bank updated the information late. This can cause your score to drop by several points and increase your loan costs. Banks may consider you a 'risky' borrower.

3. Loan Closed, but Still Showing as Active in the Report
Many people have their loans fully paid off, but the report still shows them as open. This makes your credit utilization appear higher. Banks perceive you as being heavily indebted, making it difficult to get a new loan approved.

4. Duplicate or Fraudulent Accounts
Sometimes, the same loan appears twice, or an account that you never opened is added to your report. This immediately impacts your score. The risk of fraud increases, and it negatively affects your chances of getting a new loan.

What should a smart borrower do?
Check your credit reports from all four bureaus at least twice a year. If you find any errors, raise a dispute online immediately. Keep all your EMI and loan closure documents safe. Report any fraudulent entries to the bank immediately. A clean and accurate credit report is the key to easy and affordable EMIs.

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