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Mint
5 days ago
- Business
- Mint
Credit score: 5 common errors in credit report and how to correct them
As a credit user, it is incumbent upon you to check your credit report from time to time. And if there are mistakes, it is profoundly important to correct them. For instance, there could be a mistake with regards to the payment history or the details regarding your loan. Even personal information could also be wrong in your credit report. If there is any such mistake, the credit user must get it rectified in his credit report. Here we list out five common mistakes in the credit report and how they can be corrected. I. Personal information errors: It could relate to wrong name, date of birth, incorrect PAN or address or wrong contact details. To correct this, you need to submit a correction request to the credit bureau such as CRIF High Mark. You will need to provide ID proof such as PAN card and Aadhaar. You can update the information through your bank or lender if they report it incorrectly. II. Account or loan details errors: There could be some loan or credit card which you never applied for. There could also be duplicate accounts or incorrect account status which shows active instead of closed. In such a scenario, one can dispute the error with the bureau by raising a dispute request and submit documents such as account closure letters or no-dues certificates. You can also contact the financial institution that reported the incorrect data. III. Payment history mistakes: There could be on-time payments which are marked as late, or incorrect number of days past due. Additionally, there could be EMI bounce which was reported wrongly. This can be corrected by collecting your bank/payment proof (such as bank statement or confirmation email). You can raise a dispute with the credit bureau and follow up with your bank to send corrected data to the bureau. IV. Incorrect credit limit or loan amount: There could be wrong credit limit reported on credit cards. There could also be incorrect loan disbursement or balance amount or overstated utilisation ratio due to limit errors. To correct it, you could get a written confirmation from your lender of the correct credit limit or amount. Then you could send it to the credit bureau with your dispute request. V. Outdated information: There could be settled or closed accounts which are still shown as open. Else, the old addresses or employment data is not updated. Additionally, there could be loans already paid off but still showing outstanding balance. To correct this, you can submit updated documentation (such as settlement letters and loan closure documents). You can request the lender to report the updated information to the credit bureau. You can also raise a dispute directly with the credit bureau online. Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit. For all personal finance updates, click here.
Mint
12-06-2025
- Business
- Mint
What is a soft inquiry and why it doesn't hurt your credit score
You must have heard it several times that one should check one's credit score on a regular basis. It helps you rectify any mistake which could be there on your credit report apart from keeping you stay updated of your creditworthiness. This helps you negotiate with lenders effectively at the time of borrowing a loan. What happens when you check your credit score? It leads to a soft inquiry. Those who are not aware -- a soft inquiry is a type of credit check that takes place when you check your credit score or when a lender checks your credit for a pre-approved loan offer. This also takes place when current lenders review your account periodically. There is a misconception that soft inquiry leads to the loss of credit score. I. Against the perception, soft inquiry does not affect your credit score. II. It is not visible to lenders when they check your credit report. III. This can occur even without your explicit request (for instance in case of promotional offers). I. When you check your own credit score on apps such as CRIF High Mark II. When credit card companies happen to send you pre-approved offers III. Although it is yet not common in India, but employers could also carry out a basic check without a full application. This is quite different from hard inquiry which happens when a bank checks your credit as part of a loan or credit card application. As a matter of fact, hard inquiries can bring your credit score down slightly (usually by a few points) and are likely to remain on your credit report. Disclaimer: Mint has a tie-up with fin-techs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit. For all personal finance updates, click here
Economic Times
11-06-2025
- Business
- Economic Times
Microfinance sector sees equity, borrowing and loan book shrink in FY25
Microfinance companies faced sharp declines in equity, borrowing, and loan portfolios in FY25, reflecting stress and cautious lending in the NBFC-MFI segment. NBFC-MFIs saw their equity shrink 1.8% and debt funding drop 36% in FY25 amid tightened lending by banks and investors. Loan portfolios also contracted nearly 14% as lenders slowed disbursements due to asset quality concerns. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The equity capital of pure-bred microfinance companies shrank 1.8% in 2024-25 while their outstanding annual borrowing saw a 36% drop as investors and banks tightened purse strings amid the stress in the microfinance companies are classified as non-banking finance company-microfinance institutions (NBFC-MFI).Total equity decreased 1.8% to Rs 35,759 crore at the end of March, the Microfinance Institutions Network (MFIN) said in its March quarter report. During 2024-25, NBFC-MFIs received a total of Rs 57,307 crore in debt funding, a 35.7% decrease from the previous financial is one of the two self-regulators for the to the data, banks contributed 78.4% of NBFC-MFIs' total annual borrowing in 2024-25. Other NBFCs contributed 11.9%, followed by external commercial borrowing (5.1%) and other sources (4.6%).The size of the gross microfinance loan portfolio contracted about 13.9% year-on-year to Rs 3.81 lakh crore at the end of 2024-25, according to CRIF High Mark data . The cumulative gross loan size for MFIN members declined 13.5% to Rs 3.75 lakh crore, as lenders slowed disbursement amid severe asset quality stress Among the regulated entities active in the microfinance segment, portfolio size of all entity types fell except for NBFCs, which saw a 4.1% year-on-year increase, said the MFIN report In terms of geographical coverage, east, northeast and south comprised 62.7% of the total microfinance portfolio. Portfolio quality as measured by PAR 31-180 – which indicates the percentage of a loan portfolio considered at risk of default within 31 to 180 days of delinquency – was 6.3% against 2.2% at the end of FY25.
Time of India
11-06-2025
- Business
- Time of India
Microfinance sector sees equity, borrowing and loan book shrink in FY25
The equity capital of pure-bred microfinance companies shrank 1.8% in 2024-25 while their outstanding annual borrowing saw a 36% drop as investors and banks tightened purse strings amid the stress in the sector. These microfinance companies are classified as non-banking finance company-microfinance institutions (NBFC-MFI). Total equity decreased 1.8% to Rs 35,759 crore at the end of March, the Microfinance Institutions Network (MFIN) said in its March quarter report. During 2024-25, NBFC-MFIs received a total of Rs 57,307 crore in debt funding, a 35.7% decrease from the previous financial year. MFIN is one of the two self-regulators for the sector. According to the data, banks contributed 78.4% of NBFC-MFIs' total annual borrowing in 2024-25. Other NBFCs contributed 11.9%, followed by external commercial borrowing (5.1%) and other sources (4.6%). The size of the gross microfinance loan portfolio contracted about 13.9% year-on-year to Rs 3.81 lakh crore at the end of 2024-25, according to CRIF High Mark data . The cumulative gross loan size for MFIN members declined 13.5% to Rs 3.75 lakh crore, as lenders slowed disbursement amid severe asset quality stress . Among the regulated entities active in the microfinance segment, portfolio size of all entity types fell except for NBFCs, which saw a 4.1% year-on-year increase, said the MFIN report . In terms of geographical coverage, east, northeast and south comprised 62.7% of the total microfinance portfolio. Portfolio quality as measured by PAR 31-180 – which indicates the percentage of a loan portfolio considered at risk of default within 31 to 180 days of delinquency – was 6.3% against 2.2% at the end of FY25.
Mint
10-06-2025
- Business
- Mint
Low credit score = high interest: Here's how to fix it and save big on personal loans
As the Indian financial landscape evolves the importance of a healthy credit profile and a high credit score for securing affordable personal loans have never been cleaner. It is crucial to acknowledge the fact that even marginal improvements in your credit score can result in substantial savings on interest payments, thus making it important for aspirational borrowers to understand and manage their credit health efficiently. Your credit score reflects your creditworthiness. It basically ranges from 300 to 900 and is provided to individuals by leading credit bureaus such as CRIF High Mark, CIBIL, Equifax among others. Lenders utilise this score to calculate and assess the risk of lending to you. That is why a high credit score matters for seamless approval of a personal loan. A higher credit score signals to financial institutions and NBFCs that you are less likely to miss out on repayments and default, thus making you eligible for lower interest rates, premium credit cards and better personal loan terms. Applicants who have a credit score of 750 or above are considered financially disciplined and are offered the most lucrative and highly competitive interest rates. Amit Bansal, Founder, BharatLoan, says 'Credit scores in India are primarily driven by factors such as high credit utilisation, increased reliance on BNPL, credit cards and low awareness about factors like timely repayments, multiple credit inquiries and loan tenures.' It is these factors that cumulatively influence an individual's credit score and their overall credit profile. Hence, financial discipline becomes indispensable to effectively manage your credit profile and keep your credit score above 750 to avail seamless credit to facilitate lower interest rates on personal loans and swift approval of premium credit cards. Credit Score Range Creditworthiness Impact on Loan Interest Rate 750-900 Excellent Lowest interest rates; highest chances of approval 700-749 Good Eligible for competitive rates; minor negotiations possible 650-699 Average Moderate rates; loan may be approved with conditions Below 650 Poor or Risky High interest rates or loan rejection Note: These ranges are illustrative and may vary slightly across lenders and credit bureaus. Interest rates have a deep relationship with credit scores. It is crucial to acknowledge because leading banks and financial institutions check credit scores carefully before allowing funds to be given to borrowers. For example, HDFC Bank provides personal loans at rates starting from 10.90% per annum for aspirational borrowers with excellent credit, whereas those with lower credit scores could face high rates. The rates can be as high as 24% or even more. Meanwhile, IDFC FIRST Bank loan applications begin from 9.99% for top tier applicants i.e., those that have very high credit scores but the rates climb for those who have poor credit scores and weak credit profiles. A minor improvement in your credit score, say from 700 to 750 can move you into a lower risk bracket. This also has the potential to reduce your interest rate by 0.5% or more. Now over the lifetime of a particular loan this can translate into significant savings, especially on larger loan amounts. On time repayment: Ensure that all your EMIs, credit card bills or pending loan payments are paid on time. As payment history is the most critical part of a credit score. Ensure that all your EMIs, credit card bills or pending loan payments are paid on time. As payment history is the most critical part of a credit score. Management of credit utilisation: Focus on keeping your credit card balances low relative to your credit limits to maintain a healthy credit utilisation ratio. This depicts financial control and discipline. Focus on keeping your credit card balances low relative to your credit limits to maintain a healthy credit utilisation ratio. This depicts financial control and discipline. Limit new credit applications: Strongly avoid applying for multiple loans, credit cards or any other kind of credit line in a short period of time. As this can negatively influence your score. Strongly avoid applying for multiple loans, credit cards or any other kind of credit line in a short period of time. As this can negatively influence your score. Maintain a long credit history: Do keep older credit accounts active. Accounts such as old credit cards can positively influence your score as they signify a history of consistent repayment and management of credit lines. Therefore, in today's competitive market even a modest boost in your credit score can result in unlocking and opening up lower interest rates and better personal loan opportunities. With personal loans interest rates ranging from as low as 9.99% to over 36% across numerous banks in the county, a major part of the same depends on your own credit profile. That is why optimising credit health, reading about the same, and understanding the basic concepts related to it is a smart financial move. Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
