“My CIBIL Score is 523 and one of the agencies is promising me to repair CIBIL Score in just 60 days. Should i go ahead?”. This was one of the queries posted by one of the readers of the blog. This individual i.e. Person A dropped a mail to me and mentioned that agency is demanding Rs 30,000 to repair CIBIL Score. His problem was that he bought a flat of Rs 1 Cr in Mumbai and paid booking amount of 20% i.e. 20L to the builder. The builder threatened to forfeit the booking amount if he is unable to arrange a home loan.
He informed the builder the at the time of paying booking amount that his CIBIL Score is low and he might not get home loan approval. Because of this reason he was not so keen to buy the property. The builder promised that he will get his home loan approved else he will refund the 100% booking amount. Thus, this guy was trapped in a builder’s false promise as i shared in my post, Buyer’s Beware of 5 False Promises By the Property Developer.
As a next step, i suggested him to check with the agency how they will repair credit score in 60 days. The agency was not willing to share the nitty gritty. This is just one of the agencies who are in a business to cheat borrowers on the pretext that they will repair CIBIL Score. As the borrower is in an urgent need of funds/loans, therefore, they are willing to shell out the money demanded like in the case of Mr. A. Willingly or unwillingly Mr. A agreed to avail the services of the agency and paid the amount as there was no other option left behind. The agency suggested him to apply for new PAN and based on that his home loan will approved through 2nd rung HFC.
This incidence reminded me of a movie DDLJ. Wherein the actor tells that every problem in life has 2 solutions i.e. Right and Wrong. The right solution is long and painful. Whereas the wrong solution is basically a shortcut and may look better option. We should never take shortcuts as we can land in trouble. There is no alternative to correct approach. Therefore, you cannot repair credit score overnight in a rightful manner. In my post, Credit Report – 5 Imp factors that decide your credit score i highlighted 5 factors you should focus to repair CIBIL score. Trust me it takes min 9-12 months to repair CIBIL Score.
Now you must be wondering how some agencies promise and repair CIBIL Score within 60 to 90 days. Remember that there is always a right and wrong way to do it. Though i am not generalizing the statement but trust me most of the agencies repair CIBIL Score through fraudulent ways. I strongly suggest that you should not be trapped else you will regret whole life. Let’s check out
3 Fraudulent Ways To Repair CIBIL Score You Should Avoid
1. New PAN / Change in PAN details:
This is the easiest way to clean the CIBIL Score. As per my understanding, the Name of an Individual, Father’s Name and Date of Birth of an individual is a unique combination. The possibility of all three data points being same for 2 different individuals is a rare possibility but not impossible. The same combination is used by the financial institutions to identify an individual. Any change in this combination means the possibility of a mischief.
I will share my own case that exposed the loophole in the system. In Maharashtra, there is a practice to include the father’s name as the middle name. I stayed in Mumbai for 10 years and i never included my father’s name / initials in my name. Whenever i used to update my PAN details i.e. address through physical application form, my father’s first name or initials were included in my name as a middle name on PAN. Maybe a mistake from data entry operator who might be from Maharashtra.
In the case of the manual filing of ITR, my TRP included my father’s name in the ITR as middle name and same got updated in the PAN. Every time i used to get it corrected as my all other documents were issued with only First Name and Surname. Now, in this scenario, it is very convenient to repair CIBIL Score. If my father’s name / initials are included in the PAN then based on that i can change my bank account and other documents. The new combination of Name, Father’s Name and DOB is now unique and I am good to go for a new/fresh credit life.
Earlier it was very easy for females to repair CIBIL Score provided their PAN had father’s name. After marriage, the so-called credit agencies simply updated the father’s name with the husband’s name. Voila, a new unique combination is created to repair CIBIL Score. The govt realized that this loophole is misused and then made it mandatory to mention only father’s name for both married and an unmarried female. In other words, husband’s name is not mentioned in the PAN of women even after marriage.
There are various other ways to change this unique combination that i would not like to mention on a public forum. In fact, i might not be aware of some and i don’t want to know also. If none of these options work then these agencies suggest the borrowers opt for new PAN through some fraudulent ways to repair CIBIL Score. As i mentioned in my post, PAN – Where it is mandatory to quote that it is illegal to hold more than one PAN. Also in the case of error or mistake in PAN, you should immediately bring to the notice of income tax department.
2. Wrong Updation:
Let’s accept the fact that there are hundred of financial institutions who can update the CIBIL database. To clarify, CIBIL is like a hard disk of a laptop. It shows what is written on it. CIBIL does not verify, check or cross check the correctness or authentication of the data shared by the financial institutions.
Let me share real life example of Mrs. Richa Sharma (Name changed on her request). Now last month she was shocked to know that her name is updated as Richaa Sharma in CIBIL database. It was just a typo error from the financial institution. This mistake was done by one of NBFC’s that rejected her consumer durable loan because of low CIBIL Score.
Now this wrong updation provided her a golden opportunity to repair CIBIL Score. She raised an online dispute against all the accounts/records hurting her CIBIL score. Trust me the trick worked and all the accounts with default/delayer payment were removed from her CIBIL database. The reason being her unique combination of Name, Father’s Name and DOB changed because of change/error in the name. This case cannot be termed as fraudulent as it was because of error/mistake by NBFC. The individual only took advantage of this error/mistake.
Now assume that one of the financial institutions slightly change your personal details intentionally or unintentionally say the addition of an alphabet in your name or Father’s name. This wrong updation will help to repair CIBIL Score :). Once the accounts with default/delayed payment are removed then CIBIL Score will increase sharply and the borrower is HOME or comes out clean. After some time, he/she can request for correction in name with the same NBFC and that’s it. I am not sure how easy or difficult it is.
3. Wrong mapping / mistaken identity:
Not many people are aware that besides PAN, you also need to enter or provide one of the identifiers such as passport no, driving license no etc mapped to your CIBIL account. Again to share real life example of Ms. Madhuri (Name changed). She applied for a loan and she was shocked to know that it was rejected because of default on the personal loan. She got hassled as she never availed any personal loan. I suggested her next steps of the investigation. We found out that Passport no mentioned in her CIBIL report was not hers.
Possibly, what happened, her CIBIL Score was 826 and some financial institution mapped passport no of some other individual say Ms. 420 with the same name and father’s name to her account. It helped Ms. 420 to avail personal loan as the NBFC from which she availed her personal loan pulled her CIBIL Score based on passport no. They happily approved personal loan as the CIBIL score of Ms. 420 was appearing as 826 based on passport no wrongly mapped to CIBIL score of Ms. Madhuri. Unfortunately, the onus to prove this error/mistake whether unintentionally or through fraudulent way rests with Ms. Madhuri. The wrong mapping or cases of mistaken identity are common. Someone may misuse this loophole to repair CIBIL Score of defaulters :).
Words of Wisdom:
As i keep highlighting that you should pull out your CIBIL report at least twice a year for any errors/mistakes/wrong reporting etc. As per RBI guidelines, you will get one report FREE every year from 1st January 2017. Therefore, you can utilize this free option to keep a tab on your credit score. Thanks to RBI.
You are in danger zone especially if your CIBIL Score is good. Someone might use this opportunity to repair CIBIL Score of the defaulter. Secondly, people with the very common name should be extra cautious. For example, i know 5 people whose name is Vivek Goel and 3 people with the name of Neha Suri. It is not necessary if you don’t know people with the same name then they don’t exist. To test, you try to create email id with your full name and check how easily you can get a username. Alternatively, search the web with your name.
Nothing can replace the efforts to repair CIBIL Score by following good credit practices. If you are in a hurry, you may insist on CIBIL Masking. If you are planning to avail any services to repair CIBIL Score then it is important to know how the agency will help you in this regard.
Disclaimer: The conclusion and inference shared by me in this post are based on my personal research and experience shared by readers of this blog. There is NO information available on this topic in public domain. I do not take any responsibility for misinformation or miscommunication from my end purely unintentional in nature. This post is shared just to caution reader’s against fraudulent practices (if it exists). I do not undertake any responsibility for the correctness, adequacy, accuracy or completeness of any kind of information provided through this post. By accessing and browsing this post you accept, without limitation or qualification, the “Disclaimer“ available on this blog/website.
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