While missed or delayed payments remain the most common reasons for credit score drops, experts confirm that timely repayments are only one part of the assessment. According to Santosh Agarwal, CEO of Paisabazaar, other factors such as high credit utilisation, closing old credit accounts, multiple credit applications within short spans, and changes in overall credit profile can also impact scores. However, these factors typically lead to relatively small score movements. As reported by Mint, a sudden 50-60 point drop should not be ignored, as it could indicate reporting errors or even potential identity fraud.
The first step in identifying potential errors involves downloading detailed credit reports rather than relying solely on credit scores displayed on banking or fintech apps. According to Agarwal, consumers should carefully verify whether any payments have been incorrectly marked as overdue, whether there are unfamiliar loan or credit card accounts, unauthorised hard enquiries, or accounts that continue to appear as active despite being closed. If discrepancies are found, immediate reporting to the concerned bureau and lender is essential, as reported by Mint.
Experts advise consumers not to wait for the next reporting cycle when finding incorrect entries. Agarwal recommends immediately reporting incorrect entries to the concerned bureau through its online dispute resolution process and simultaneously informing the lender, as bureaus rely on lender data for verification and updates. Supporting documents such as credit card statements, loan statements, payment receipts, and bank transaction records should be prepared, as lenders may seek them during the verification process. According to Mint, genuine reporting errors are generally resolved within about 30 days when consumers submit all necessary documents and lenders respond promptly.
Regular credit report review and prompt dispute of incorrect information can help protect credit profiles and prevent unnecessary hurdles when applying for loans or credit cards. As reported by Mint, if the report reflects recent credit applications, higher credit utilisation, or fresh borrowings, the score decline is more likely linked to the consumer's own credit activity rather than reporting errors. Puja Abhishek Singh, CEO of Manipal Fintech, emphasised that credit bureaus evaluate multiple aspects of credit behaviour, not just repayment history, making regular monitoring essential for maintaining accurate credit profiles. Financial experts also recommend focusing on payment history, keeping utilization ideally below 30% (lower is better), maintaining a long-standing account and limiting hard inquiries rather than carrying credit card balances to build credit.
