In identity theft cases, a person is not even aware that a loan has been taken in his name. The person generally becomes aware only when the lender starts chasing for repayment or while checking the credit report.
You can now book a movie ticket, book a cab or buy a flight ticket at the click of a button. The simplicity, however, comes with its inherent risks, as fraudsters can sometimes take over your identity without your knowledge and as much as take a loan in your name. The recent victim of such fraud is Sunny Leone who has claimed that her PAN details were used to take a loan of Rs 2,000 on the fintech platform Dhani Stocks Limited. It is not just Sunny Leone, but a deluge of people has been impacted by the fraudulent use of their PAN by third parties to obtain loans from the company. Dhani Stocks Limited is a part of the Indiabulls Group.
In identity theft cases, a person is not even aware that a loan has been taken in his name. The person generally becomes aware only when the lender starts chasing for repayment or while checking the credit report. This is why checking your credit report regularly is very important as it showcases not only your past but also existing loans and credit card dues.
The 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 dues in future. 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 constitutes almost 35 per cent of your total score. All mortgage payments and credit card bills, therefore, need to be paid within the due date to maintain a good credit score.
Considering repayment behaviour is an important factor, any default on a loan severely affects your credit score. Therefore, if any such fraud happens to you the first step should be to rectify it.
Credit scores can surely be improved, but there are no shortcuts to it. The only way you can improve your credit score is by having repayment discipline. In case your score has got impacted by identity theft, then the only way is to reach out to the lender and lodge your complaint about the same. In parallel, you shall reach out to all four credit bureaus and request the removal of the account from your report. Credit bureaus then coordinate with the lender and remove these accounts after confirmation from the lender. Once removed permanently, it will correct your credit score. If not corrected, this will have long term implications as future lenders will continue to see this as an actual default, impacting your future borrowing capabilities, says Anurag Sinha, Co-founder & CEO, OneScore & OneCard.
Victim of identity theft? Here is how to rectify your credit score
The process however to do so may be time-consuming, as even after you reach out to the lender informing them about such fraud, the lender will also take some time to decide whether it’s really a case of identity fraud or not. During all such time, non-repayments would have got reported against the impacted party, which would impact credit scores in a significant manner, says Sinha.
Prevention is better than cure. It is therefore important to check your credit report as a regular habit and not just at the time you want to take out a loan. One of the ways to safeguard against identity theft is to remain aware of what gets included in our credit report.
Sinha says you shall check out whether all loans or cards mentioned in the report really belong to you and are reflected correctly in your report. Moreover, all closures and repayments of your loans are reflected properly or not.
Regularly verifying your credit report is the only way you can safeguard against such frauds. Such frauds may happen without your knowledge, but the sooner you get to know about it, the more effective you will be to combat such frauds. It’s important to check your credit report as a regular habit, preferably every month, says Sinha.