Wednesday, 13 July 2016

How An Identity Fraud Can Ruin Your Cibil Score?

Identity fraud is always ravaging. The impostor not only steals away your personal information but casts a dark cloud of uncertain financial crisis for your future. And you are left with the list of unpaid credit bills and loans that were never drawn by you. The CIBIL Score bleeds out and the hope to enliven financial health is minimal.


Here is a guide on how an identity fraud can ruin your CIBIL Score and what are the best possible ways to protect yourself against such financial catastrophe?

Dangers of Identity Fraud
First of all, the impostor would use your personal details to make enquiries for loan and credit cards. Every time a new query is made to the bank, it will be reported to CIBIL. This will increase the number of hard enquires on your Credit Information Report. Multiple hard queries would affect the score badly.

As the scammer would succeed in opening a new account on your name, it will again add an account in your CIR. Next, due to non-payment the balance on your name would rise and hurt the score. Just a single month of delinquency can severely impact and result in a drop in CIBIL score.

The imposter can simply change the address and contact number to deceive you for longer period of time. By changing contact details, you would realise only after too much of loss is already incurred.

Not to forget credit cards here. These are even easier to misuse. If you have a really good CIBIL score, the impostor can easily apply for fresh credit cards such as instant approval credit cards on your name and keep on increasing dues for you.

As, they already have access to your other credit cards, they can misuse those as well. So not only your bills would skyrocket but your credit utilization ratio would also take a leap. The score thus is bound to hit the rock bottom levels due to following points:

1.            unpaid new debts
2.            increase in debt to income ratio
3.            increase in credit utilization ratio
4.            frequent enquires for fresh credit

All the factors collectively can ruin the score to irreparable levels.

Watch out credit report!
As prevention is always considered better than cure, you should always monitor your credit report thoroughly many times in a year. When you are alert, no impostor can ruin your financial health. Never ignore an unidentified action on your report- be it a query of a bank or an update in your personal data. Always notify CIBIL if you identify any unknown activity on your report.

Besides the report, you should personally be shrewd enough to not handle your documents to anyone without a strong reason. It is better to write the purpose of document while sharing there itself. Similarly ask for your documents back whenever the purpose is not resolved. Do not leave a copy of documents with anyone.

In fact do not share confidential information such as credit card numbers and other personal ID details on phone or chat windows. While submitting data online, check the authenticity of the website. Read the privacy policy to ensure that your data is not shared with the other parties.

It is also wise to keep photocopies of your cards with you so that you can block it anytime.

When you find traces of identity fraud
Whenever you discover an unidentified action in your report you should inform your bank and CIBIL about it. If the damage is yet to happen, you would save a real time financial crisis in your life.  However, in case of the mishap, you can only rely on the bank to help you track the credit transactions.

You should also contact the local police station in person and get the case filed. The cyber-crime team with the help of information provided by bank may solve the case for you.

You would also need to raise a CIBIL dispute so as to block your account for further damage. The damage caused by identity theft is not limited to one area. You would need to clear out all the disputes related to credit cards, loans and queries separately.


The process is lengthy and would take much of your hard work and time. You may also consider professional services to mend the credit history loss.

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