Loan closure not updated credit report:
If you’ve recently closed a loan but notice that it is still showing as “active” on your credit report, you may be concerned about the impact on your credit score. A delay in updating your loan closure can occur, and it’s essential to address it as quickly as possible to avoid any negative effects on your financial profile.
Lenders typically take 30 to 60 days to report the closure of a personal loan to credit bureaus. During this time, your loan may still appear as “active” on your report, affecting your credit utilization rate. In some cases, delays can be caused by:
Lenders not updating the internal status of the loan.
Processing issues, such as batch reporting schedules not aligning with the credit bureaus’ timelines.
Backlogs in the lender’s operations, especially during busy periods.
Here’s a simple guide to help you get your loan closure reflected correctly:
1. Contact Your Lender
Begin by reaching out to your lender. Whether via phone or email, request confirmation that your loan has been closed. Most lenders will report this to the credit bureau during their next data submission cycle.
2. Gather Documentation
To support your claim, obtain and keep the following documents:
No Due Certificate or Loan Closure Letter.
A copy of the final loan statement showing a zero balance.
The date of your last EMI payment.
3. Dispute the Error with the Credit Bureau
If your loan status doesn’t update, visit the credit bureau’s dispute portal. Upload your loan closure documents and wait for the issue to be resolved, typically within 7-21 business days.
4. Track Your Credit Report
After filing the dispute, monitor your credit report regularly. Once the dispute is processed, your loan status should be updated, and your credit score could improve as your credit utilization decreases.
When to Take Further Action
If the loan status hasn’t been updated after 60 days, escalate the matter to the lender’s complaints department. You can also approach the Reserve Bank of India’s complaint portal or the Banking Ombudsman. Ensure you have all relevant documents for escalation.
Prevent Future Discrepancies
Request a new credit report and keep a confirmation of your loan closure. It’s also helpful to confirm the lender’s data reporting schedule to avoid delays in the future.
Why Timely Updates Matter
Having an accurate credit report is crucial for securing future loans or credit cards. An updated credit report shows lenders that you are financially responsible, helping to build trust and secure better financial opportunities.
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