Doctor wins ₹2.6 lakh compensation: Why regularly checking your credit score matters

A fascinating story from a doctor practising in South Bombay illustrates how a minor error from a credit card issuer can impact your CIBIL score over time, reported Economic Times. Dr Bhalla was shocked to discover that despite fully settling his credit card debt in 2003, the issuing bank had erroneously reported him as a defaulter, leading to a significant drop in his CIBIL score by 2012.

Upon discovering the error, the doctor pursued justice by presenting his bank statement, which indicated the payment made to the credit card issuer. Armed with this evidence, he approached various authorities for resolution, including the banking ombudsman, district consumer commission, state consumer commission, and finally the NCDRC.

It took seven years for the credit card issuing bank to acknowledge its error. Though delayed, justice prevailed when the Ombudsman confirmed the validity of the claim and closed the case. While the outstanding credit card dues were resolved, the damage to the credit history and low credit score persisted. To address these issues caused by the credit card issuer’s mistakes, the doctor pursued legal action.

Ultimately, the bank was held accountable for the adverse impact on the doctor’s credit score. This incident may not be isolated, where credit card issuers mistakenly penalize customers despite timely repayments. Such cases highlight the necessity of vigilance and regular monitoring of one’s credit score.

Many credit cardholders neglect to verify their card transactions, a critical oversight highlighted by the doctor’s case. This underscores the importance of regularly checking your credit score.

• Catch errors early: Errors on your credit report are possible and can lower your score. Regularly checking enables you to spot and challenge any inaccuracies before they become problematic.
• Prevent fraudulent activity: Timely monitoring of your credit report is essential to detect any signs of fraudulent activity. Regular checks enable you to identify suspicious inquiries or unauthorized accounts, allowing you to take swift action to safeguard against identity theft.
• Track your progress: Regularly monitoring your credit score allows you to observe the results of your efforts to improve it. This can provide motivation and help you maintain your momentum towards your financial goal.
• Check your score before applying for credit: Understanding your credit score in advance can help you qualify for loans and credit cards with better interest rates. This preparation prevents unnecessary applications for products that may carry higher rates or risk being declined.

In summary, regularly monitoring your credit score is essential for maintaining strong financial health. It empowers you to take proactive steps in managing your credit and safeguarding against errors and fraud.