Common Credit Score Issues & How to Fix Them

A poor credit score can completely block your home loan, mortgage loan, or business loan approvals. Some of the most common reasons Hyderabad borrowers see a lower-than-expected CIBIL, Experian, or Equifax score include:

Common Credit Score Issues Faced by Borrowers

• Late or missed EMI payments — Even one missed payment results in a "Days Past Due" (DPD) flag, which negatively impacts your score.
• High credit utilization ratio — Regularly using more than 30% of your total credit card limit indicates high dependence on credit.
• Too many loan/card applications (Hard Inquiries) — Applying to multiple lenders simultaneously triggers separate hard inquiries, lowering your credit score.
• Accounts Marked as 'Settled' or 'Written Off' — Settling a loan by paying a lower amount than the actual dues closes the account, but the "Settled" status remains on your CIBIL report for 7 years, raising red flags for future lenders.
• Identity Theft or Clerical Errors — Typographical errors, incorrect PAN mapping, or fake loan accounts mapped to your name by mistake.
• No Credit History (Thin File) — Having no credit card or loan history leaves you with an NH/No-Score status, making it hard for lenders to assess creditworthiness.

Step-by-Step Guide to Fix Credit Score Issues

To resolve these issues, you must download a full copy of your credit reports from all four bureaus (CIBIL, Experian, Equifax, CRIF High Mark). Review each account carefully. If you find errors or incorrect "Settled" statuses on fully paid loans, you must initiate the official dispute process on the respective bureau's portal. Under the Reserve Bank of India (RBI) guidelines, banks and credit bureaus must rectify valid dispute items within 30 days, failing which they face penalty directives.

How LFS Loans Resolves Credit Record Errors

LFS Loans provides comprehensive credit report analysis. We check for clerical errors, DPD records, duplicate accounts, and guide you through the process of obtaining a "No Dues Certificate" (NDC) from lenders to submit to bureaus for dispute clearance, helping you restore loan eligibility.