How To Remove Name From Cibil Defaulter List?

Remove Name From Cibil Defaulter List

Getting a loan being a CIBIL defaulter can become really difficult. It would also depend on the type of loan you want to borrow. In case of a secured loan, your chances of getting an approval on loan application can be higher than unsecured loan. This is because, the security you will be asked to pledge by your lender will determine your creditworthiness. However, a mark of defaulter on your credit report can surely impact your interest rate even if your lender accepts your loan request.I recommend you to improve your credit score beforehand.

Here Are Four Simple Steps Which Can Help You Improve Your Credit Score:

Work On Your Credit History: To determine the root cause of your bad credit history – for instance, is it because you lack sufficient income or because you didn’t pay your EMIs on time.

Make a financial plan: Create a financial budget to manage your income sources, savings, expenditure needs, and debts in a better way. This will help you prioritize and allocate resources to pay back your debt without hampering your lifestyle adversely.

Repay your existing loans: Find out the loans on which you are being charged high interest rates and pay them off first. With this approach, the debts get paid more quickly and you end up paying less in terms of overall interest. Also, this repayment strategy also improves your credit score.

Repay your loans on time: Ensure that you pay your credit card bills and loan EMIs on or before the due date. A simple way of doing this is by setting up reminders in your phone to pay the EMIs on time.

How To Remove Name From Defaulter List

Now the question arises as to how we can remove our name from CIBIL defaulter list?

The easiest and the most basic answer to this question is repay your debts and your problem will be solved i.e. repay and make good every debt whether related to loans or credit card or any other factor which negating your credit standing.

Major concern of worry is that the individual has defaulted in making payment and in near future it is not possible to make the complete payment. In such circumstances, bank offer for one-time settlement which is a reduced amount from total outstanding. If an individual accepts this offer and does the settlement then his name would appear in the report as Settled and the outstanding amount according to bank would still show on the Credit report and will stay there for 7 years minimum and it will destroy your score.

One-time settlement can save defaulter from court recovery proceedings but it will remain a dent on the Credit Score. To remove your name from Defaulter List. The Defaulter would need to make payment of outstanding amount in the report and would need to notify to the CIBIL to remove name from Defaulter List. If even after making payment of outstanding amount, CIBIL do not remove the name from the Defaulter List then the Individual can move to Court to give direction to remove name from the List.

What Is Defaulter Or Negative List?

There is no such thing as CIBIL defaulter list. So, there is no question of the removal of your name from a CIBIL defaulter list. The best you can do is to improve your credit history by payment of your dues regularly at the right time and fully settle your loans and credits at the right time.

A Cibil defaulter tag, on the CIBIL report, could take years of effort to erase. It not only prevents you from getting fresh credit, but also disrupts your reputation. A good repayment history can be halted by a single default. Defaults also welcome penalties and hiked interest rates. So, be smart and disciplined to always pay your EMIs on time. The only way to avoid any credit rejections in the future is by improving your credit bureau score; there is no other way. Never allow a ‘Written-off’ or ‘Settled’ status to remain on your credit bureau report. The more ‘Closed’ status’ the better for your credit bureau score.

Every individual has the right to access his/her credit bureau report. You can request for your credit bureau report from the bureau website. You can check the report to understand the instances when you under performed in your credit responsibilities.

There are 5 ways through which your name could appear as a credit bureau defaulter.

Credit Related Default

This simply happens when you do not pay your loan or credit card EMIs, on time. In this case, you need to clear all the pending EMI payments, at the earliest. Credit bureaus, generally publish a monthly report to ensure that you clear the pending dues, & prevent your name from getting re-tagged as a ‘Defaulter’.

Human Error

Check if Your Name, gender, PAN and address could have been entered in a wrong format. If so, then contact the credit bureau to get it rectified. Provide valid documents as proof. In case, the issue is due to human error at the credit institution, report the same to the institution, & attach a copy of the report. Once rectified by the institution, get an acknowledgement of the same, and send it to the bureau for updating. The error could also be due to identity theft or fraud; where someone has used your details to avail a loan, and defaulted.

Determine The Cause

To begin with, determine the reason behind this. It could be due to one of the three reasons mentioned above. A technical or human error can be corrected by contacting the bank. In case of an actual default of the loan, it is essential to clear the dues with your financier and then contact the credit bureau and take necessary actions to remove your name from the list.

Periodically Check The Credit Score

Regularly check the credit score so as to ensure that your name has not entered the list again. This activity may be done every few months to be on the safer side.

Set Up Payment Reminders And Pay Emis On Time

Many times, it may happen that you forget to pay your EMIs on time. In that case, it is advisable to set up reminders for yourself. Else, some Banks & NBFCs do send reminders in an email or a text message when the payment is due - do pay attention to these communications.

Reduce The Amount Of Debt You Have

Although this is easier said than done, lower debt will mean timely repayment and a positive credit score. If you have liquidity at hand, try and prepay your loan, you can also pay off the credit card bill in advance. Do not wait for the credit period to end, instead reduce the amount of debt as soon as you can.

Pay Off Debt, Instead Of Moving It Around

Debt comes with a responsibility to be repaid. Although it also has the facility to be moved around and converted into another debt. This circle does not end unless it is paid off. It is advisable to pay off the debt instead of converting into another loan simply by altering the tenure. Paying off the debt will put an end to it. Avoid moving around the same debt with different terms and conditions, instead pay it off on time.

Remove Name From Cibil Defaulter List After Settlement

You can get the 'settled' flag off your credit report by paying the waived amount what Bank provided You at the time of OTS (One time Settlement) at a later date. If the loan has been settled but not written off from the bank's books, the interest will keep accruing, So, If Rs. 50 was waived at the time OTS that would not be Rs.50 now it might have become Rs 500.

Find a expert or professional of credit counselling who can help you to negotiate with banker for the closure of loan/credit card. Pay the agreed amount, get a closure and no dues letter from the Bank.

Once the dues are paid, the lending institution shall send the status on this loan to CIBIL as “closed”.

Note: Please note that the CIBIL only makes the changes to your report only after the lending institutions submit the updated data.

A prospective lender will take into account many other things, including your credit score and the amount waived at the time of settlement, before taking a decision on the loan application.

However, to avoid these hassles, the best strategy is to pay all your loans on time and keep a check on the urge to overspend on borrowed money.

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