CIBIL Score – Identity Theft

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

What would you do if you come to know that a bank has sanctioned a loan in your name when you have not actually applied for any? How would you react when you find out that someone has used your name to get a credit card and has run up in couple of lakhs of rupees in charges using it?

Or worse, what if any of your credit card is used for some criminal activity? You would most likely stand clueless and approach the bank in a panic to ask for all the details about it. Most commonly this is a result of something called “Identity Theft” or just “Id Theft”.

Now, what is this Identity Theft? Identity theft occurs when someone uses your personal identification information to apply for a loan or a credit card. If this loan is sanctioned or credit card is issued, the individual has access to those credit facilities against which you would be held liable, if not paid for. Hence, the lender will update this default in your Credit Information Report (CIR) which will severely affect your CIBIL score.

Many a times we are required to provide our self-attested personal identification information in the form of PAN card, passport, driving license, voters id card or other similar documents, say for getting a bank account opened or making some kind of investment. Do we mention the purpose on the Xerox copies of these documents while we hand-over them to the concerned individual? Most of us do not. This careless act of ours leaves a big scope for these fraudsters to misuse our documents in such a way which might make us regret for the rest of our lives.

If you have read the previous CIBIL articles posted here, then you must be aware by now that how important role your clean CIR or CIBIL score plays in the loan application process. It helps you enjoy the benefits of easier and faster processing of loans or credit cards at better rates and/or terms.

How to prevent Identity Theft?

Identity theft can happen with anyone. You cannot simply sit idle and think it is not going to happen to me. Here are some things you can do to safeguard yourself:

1. Never share your credit card numbers and other personal identification information, especially over the phone or while browsing the internet.

2. Many companies ask for more information than they really need. Try filling the application forms yourself and provide only that information which is marked mandatory or which is required for your own convenience.

3. Carry only as many credit cards in your wallet as are absolutely necessary. Keep photocopies of all your cards handy with you so that they can be blocked quite easily in the event your wallet gets stolen.

4. Always deal with only those entities and websites which have been authenticated by service providers like Symantec etc. You can check the website’s legitimacy by clicking on their logo and thereby eliminate the risk of dealing with a clone of the legitimate company designed to collect your personal and financial information.

5. Make sure all your personal information you enter on a website remains strictly confidential. Read the website’s privacy policy to ensure that your personal information won’t be sold to others.

6. Review your CIR and monitor your CIBIL score at least once or twice every year to make sure your credit history accurately reflects your credit usage and activity and no unaccounted credit facility gets extended in your name and no new enquiry gets initiated by any of the banks. If you notice any discrepancy in the report, get in contact with the lender as well as the credit bureau immediately.

7. Make sure nobody, other than you or your close family members, has access to your personal information, identity proofs and address proofs. Keep all of these documents in a secure environment.

Problems can strike anyone at any time and leave a long-term impact. Awareness about some of these problems and taking necessary steps to build a shield against them can minimise their impact. So, I hope, now we all know what we need to do in order to safeguard our identities from getting stolen.

12 thoughts on “CIBIL Score – Identity Theft”

  1. Hi, great article.
    Unfortunately I am a victim of low cibil score and was looking measures to improve it as I also wanted to avail a personal loan to renovate my house. Please suggest me as the banks keep cibil score as the fundamental factor in giving loans.

  2. Hi Shiv Kukreja,
    I read your post and it is really very informative. I have got stuck in the problem like this.

    Actually, what happened, I had applied for a loan through loan agent (who is my dad’s friend. ) in a bank in Mumbai. Before applying fo a loan
    he told us that he will complete loan procedure in half of the time and for that, I just have to pay him 2% of the loan amount. And also He will take that money only if I accept that loan cheque.

    Simultaneously I have also applied in my companies Employee Society.
    his society loan was approved before the bank loan (for which I have applied a week ago.)

    The bank loan was also got approved. but I refused to take that loan and continued with my society’s loan.

    Now that bank has returned my whole file to that agent. When I asked him about my documents; he says he has spent around 20k on procedure and will be returning documents only if I pay him 20k. When I asked about bank charges it was only 3k.

    He says if I don’t pay him, then he will hook me up in fraud case. which will be affecting my CIBIL score. And I won’t be able to take loans throughout my life.

    What to do now? That file contains my self-attested documents. Please suggest a better option.

    Thanks in advance.

  3. Hi Sir,

    I have 3 policies in Maxlife since 2006 and I am continuing till now
    they are “Max Life Life Maker ”
    ” Unit Linked Investment Plan”
    “Unit Linked Pension Plan”

    NAV seem to be performing well but my find value is not increased, past 10 years what ever the amount I have paid same amount is appearing
    Can I sell all these policies

    Please advice
    Thanks and regards

  4. Seven steps mentioned above are must to Protect ourselves from Financial Losses arising out of Identity Thefts. One can also take Credit/ Debit Card Protection policies being offered by CPP or Wallet Assist.

    1. Identity Theft is a very serious threat elsewhere in the world as the consumers there in large numbers use credit cards, debit cards and the internet for making online purchases. I was reading an article in which it was stated that even big celebrities like Tiger Woods, Oprah Winfrey, Robert De Niro etc. became victim of Id Theft in the past.

      Yes, we have also started using these options for making payments. I hope the RBI and the commercial banks are keeping a sharp vigil on all these activities.

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