4 Steps to Avoid Identity Theft and Credit Fraud

Getting your finances in order is an important part of the homebuying process—but while you’re setting a budget, exploring properties and preparing to apply for a Home Loan, there’s another critical step to consider: protecting your identity. 

While checking a CIBIL report, borrowers may find unfamiliar credit card enquiries or loan accounts they never applied for. This is often how identity theft and credit fraud are discovered. 

The reassuring part is that such incidents can often be prevented, provided one remains alert and takes the right precautions.  

With that in mind, here are four practical measures that can help protect your credit profile and minimise the risk of fraud. 

Step 1 – Protect your personal information carefully 

Think of your personal details—your PAN, Aadhaar Card, mobile number, and bank account info—as keys to your financial identity. If someone else gets access, they can misuse it to take credit in your name. 

So, how do you protect it? Start with the basics. Don’t share sensitive information over calls, texts, or emails unless you're absolutely certain about who’s asking. Phishing scams often appear convincing—posing as banks or government authorities—but one click can expose your data. 

On a day-to-day level, try shredding old bank statements and loan documents, storing IDs in secure places, and avoiding using public Wi-Fi for banking or credit applications. Also, create strong passwords (with a mix of characters) and avoid repeating them across accounts. Better still, use a password manager.  

Step 2 – Monitor your credit report regularly

Your CIBIL report is a detailed history of your credit management. It lists every loan and credit card account, your repayment track record, and every new enquiry made by a lender. If someone’s tried to use your identity, you’re likely to spot signs here. 

Make it a habit to review your report at least once every few months. Look out for unfamiliar credit enquiries or incorrect personal information. Even something as simple as a misspelt name or wrong address should be resolved.  

Step 3 – Set up fraud alerts or freeze your credit if needed

If you believe your personal information has been compromised, you can take things a step further. 

Start by placing a fraud alert on your credit profile. It’s a simple and effective step that adds an extra layer of security. 

You can also consider a credit freeze. This locks down your credit profile, stopping any new credit enquiries or accounts from being processed until you lift the freeze. It’s particularly useful if you don’t plan on taking new credit for a while.  

Step 4 – Act fast if you detect anything unusual

Reporting and detecting fraud immediately is important. The sooner you respond, the better your chances of preventing the damage.  

If you notice a suspicious entry on your credit report—say, a loan enquiry or new account you didn’t initiate—raise a dispute with the credit bureau immediately. Provide any evidence you have, such as ID documents, to back your claim. 

Each of these steps forms a solid defence against identity theft and credit fraud.