Misuse of Loan Documents affect your Credit Rating

We keep submitting our KYC documents such as Identity and Address proof (PAN Card, Aadhar Card, Passport, etc) for various purposes.

We apply for various loans for example housing loans, auto loans, consumer loans, etc. Even for buying a new sim card we need to provide our KYC documents. Not only documents, they accept those documents that are self attested i.e. signature on those documents.

With documents submitted for different reasons, there can be incidents where your documents could be misused. It can be used to apply for a credit card, home loan, auto loan, and for various financial purposes in your name. This can have a severe consequence on the credit profile as it can be termed as an inquiry in your credit report and greater the number of inquiries in your credit report.

 Misusing of documents can also result into identity theft. Identity theft is when someone uses your identity to apply for credit or loans. This will benefit the person who has applied for credit and can turn into a nightmare for the person whose name is being used.

 So here are some steps that should be taken care off:

• Keep your documents in a safe place, preferably in a cabinet or a lockable drawer.

• If your documents are lost or are misplaced, you should immediately file a police complaint. Also you should approach the concerned authority with a copy of police complaint filed by you.

• While submitting documents, you should write the purpose for which the documents have been submitted on that document.

• Digitizing documents is one of the best solutions to protect the risk of losing your documents.

• Checking your credit report timely will help you to identify the inquiries that an individual has not made and can take appropriate steps to rectify the same.

Don't let anybody harm your credit rating by using your loan documents secretly.
Check your credit report at www.cibilconsultants.com

Source: Secondary