Why Is Your Credit Score Dropping Even When You Have No Loans?

Key Insights 

• Fraudsters are using stolen PAN details combined with Aadhaar numbers and other personal data to take loans in someone else’s name. This leaves innocent people with damaged credit scores, harassment calls, and zero legal recourse. 

• A fraud ring in Bengaluru created over 200 synthetic IDs using AI-generated PAN cards and Aadhaar details, defaulting on loans worth ₹4 crore across 5 fintech lenders. The absence of cross-lender identity checks meant the fraud went undetected for months.  

India’s digital lending boom has a dark side. Scammers can use your PAN card number to take out loans, buy jewellery, or even rent hotel rooms, without you ever knowing. 

The damage to your credit score is already done by the time you find out.

Unlike UPI fraud, where money is deducted from your bank and a bank alert warns you. PAN fraud only surfaces when a lender checks your credit score during a loan application. 

This means victims can go months, sometimes years, without realising their identity has been misused.

How Millions of Indians Are Paying the Price?

The problem is growing quickly. Fake identities, created using both real and fake details, have increased by about 450% since 2022, according to NASSCOM-DSCI. The lenders offering instant loans and BNPL services are at higher risk.

This can seriously affect common people. If someone takes a loan using your PAN and does not repay it, your credit score will fall. 

Later, when you apply for a loan, you may either get a higher interest rate or your application may be rejected. 

In one case, a person named S. Senthil faced a big drop in his CIBIL score because someone else used a duplicate PAN to take loans, which also harmed his reputation.

What Experts Say and What You Must Do Right Now?

Fraudsters combine your PAN with Aadhaar, mobile number, and date of birth, as explained by Dip Mehta. These details are often collected through data leaks, phishing links, or unsafe apps. 

If lenders depend only on OTP verification and have weak KYC checks, fake loans can get approved easily.

What to do if you suspect PAN misuse:

1. Check your credit report for free on TransUnion CIBIL, Experian, Equifax, or CRIF High Mark.
2. Look for unknown loans, credit cards, or enquiries.
3. Raise a dispute on the credit bureau’s website (usually resolved within 30 days).
4. Report the issue on the government cybercrime portal or call 1930.
5. File a police complaint for identity theft.

CIBIL also advises checking your credit score at least once a month. 

Conclusion 

PAN fraud is quiet, fast, and can cause serious damage. The system is improving, but you still need to stay alert. 

Check your credit report regularly, not just when you need a loan. A few minutes today can save you from bigger problems later.

FAQs

1. How can I check if my PAN is being misused and report it?  
You can check your credit report on TransUnion CIBIL, Experian, Equifax, or CRIF High Mark. Look for any unknown loans or enquiries. If you find anything suspicious, raise a dispute on the credit bureau’s website, report it on the government cybercrime portal or call 1930, and file a police complaint.

2. What is the worst misuse of my PAN details?  
The most serious misuse is when someone takes a loan or credit card using your PAN and does not repay it. This can reduce your credit score and make it difficult for you to get loans in the future.