Reactivity comparison of phenol and toluene towards electrophilic substitution Which aromatic compound is more reactive towards electrophilic substitution?
  
  
  benzene
  chlorobenzene
  phenol
  toluene
  
  
  Correct answer: phenol


But, according to me, the answer should be toluene.

My reason: Toluene is an ortho-para directing group as well as an electron-donating group which increases the electron density at ortho-para position and activates the aromatic ring towards electrophilic substitution.

Where I am wrong?
You have to make a comparison between phenol and toluene. You have identified what toluene does, but you haven't described what phenol does.

The hydroxyl group in phenol increases electron density in the ring by resonance (+M effect). Note that the methyl group in toluene increases electron density only by hyperconjugation and inductive effect.

Resonance effects are generally far more superior to hyperconjugation. Hence, without doubt, phenol is more activated towards EAS as compared to toluene.