With the rise in digital payments and personal loan apps, fraudsters are disguising themselves as legitimate lending institutions to target borrowers. Misuse of your personal information to start new credit accounts and take loans can often lead to significant financial loss. Monitoring your credit report is a solution for this, as it protects you from identity theft.
Since most credit bureaus only offer free access once a year and charge a fee for more checks, you can rely on the OneScore app. Use it to check your credit score and download your credit report from Experian and CIBIL. Here’s all you need to know about how OneScore helps you identify loan fraud while helping you increase your score.
Methods Used to Commit Loan Fraud
Your financial information can be used for various criminal activities. Some common methods used for loan fraud include:
- Phishing: One of the most common types of loan fraud is conducted through phishing. This is a general online scam where scammers use any means necessary to get you to share your personal information. They may ask for your PAN card or bank account details by pretending to be a reputed financial institution or a part of a government organisation. After getting this information, you may not hear from them again, and they may apply for a loan in your name.
- Data Breaching: Another way of committing loan fraud is through a data breach. This happens when a hacker steals information about your PAN, bank accounts and more via online files of banks, government institutions, companies’ employee accounts and more. Scammers then use this information to take loans in your name.
- Misuse of Your Documents: Another method of committing loan fraud is by misusing your documents. A scammer may get your sensitive document from third-party sources. For example, if you have given your PAN card as ID in hotels. On breaching the hotel’s security, scammers may use the information to apply for loans.
- Fake Agents or Brokers: Scammers can also target you for loan fraud by getting in touch with you as a loan broker or an agent. By providing you with a loan application, they may obtain key financial data. After they receive the initial processing fees and data, they may vanish and misuse the information to take authorised loans and abscond with the money.
Signs to Identify Loan Fraud via a Fake Loan App
When applying for an online personal loan, you must check for signs like the demand for up-front cash to process the loan application. Here are the signs to look out to spot fake loan apps:
- If the lender does not ask you to apply through official channels, be it a website or an app, then it is likely to be a fraud.
- If the lender asks you for upfront cash in the form of processing fees before approving your loan application, it may be a fraudulent offer.
- If the lender does not disclose any associated loan charges, such as the interest rate, processing fees, foreclosure charges and more, it is possible that the offer is fake.
- Another method to verify that the lender is a fraud is when its representatives give you a guarantee of loan disbursal. Before checking your credit score, eligibility, or documents, the lender can not promise you loan approval. If its representatives do that, it may be a scam.
- Banks, lending institutions, or NBFCs never knock on your door and provide you with a loan offer unprompted. Reputed lenders usually give loan offers to their existing customers. This way, if a bank is randomly giving you a pre-approved loan, you can be reasonably sure that it is a fake offer.
- If the lender’s website or application does not mention a physical branch/office address, it is a sign of a fake lender.
- If the loan provider does not have a valid license or is not registered with the RBI, you should not proceed with the loan application.
- If a lender urges you to apply for a loan by providing a limited-time offer or at zero interest, it may be a scam. Fraudsters often scam those who are in urgent need of money. They make the loan offer look very appealing and get you to share confidential information and pay a processing fee upfront.
Steps to Protect Yourself from Loan Fraud and Identity Theft
Protecting yourself from loan fraud or identity theft starts with being vigilant. Apart from that, here are a few tips to avoid falling for a loan scam.
- To apply for a loan, you must only approach verified and reputed lenders with credible reviews and licences.
- Always store your financial data and identity and address proofs confidentially. If you keep it online on your mobile, you must encrypt it with a password.
- Never share your personal information in public places such as social media.
- By regularly monitoring your credit report, you can identify any fraudulent loans.
- Minimise the use of public wi-fi for financial and sensitive transactions, as scammers in the vicinity can hack your information.
- Be aware of the latest trends and ongoing scams through news and social media.
Benefits of Monitoring Credit Score with OneScore
When using OneScore to monitor your credit reports, you can access benefits like lifetime-free credit score checks and reporting errors. Check the details below:
- OneScore lets you check your credit score and download a credit report free for life. Since credit bureaus only allow you to download your credit report once a year for free, OneScore is an affordable solution.
- Another benefit of using the OneScore app is that you can see all your credit accounts in one place. This makes it easier to spot authorised loans in your name.
- You can also report these errors directly to CIBIL and Experian in just one click.
- After accessing your credit score, this app provides you with various loan offers.
- If you have a loan/credit card in your name, this app helps you manage them with alerts and payment reminders. This helps improve your credit score gradually.
- With OneScore’s Score Planner, you can get personalised insights on improving your credit score.
- Monitoring your credit score with OneScore is easy as it comes with no ads or spam and also keeps your personal information confidential.
Monitoring your credit report is crucial for protecting your credit health. Without it, you can become a victim of fake loans that take your score down and hold you financially liable. So, before using any loan app, ensure that it’s a trusted lender. You can rely on OneScore to not only identify and report fraud but also to get an instant personal loan through its OnePL facility.
You can borrow up to ₹5 Lakhs at competitive rates and no documentation. Apply on the OneScore loan app today to secure the best loan terms and protect yourself from fraud and identity theft!
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