How To 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.

FAQs

How to Remove 'Written-Off' from My CIBIL Report?

you cannot remove the written-off statement as it will be recorded in the credit history. However, you can change the status of your by paying back the remaining amount.

After paying the amount in full, get a ‘No Due Certificate’ from your lender. Following this, your credit report status will be changed.

How to remove a bad repayment track from PAN card with CIBIL?

Your repayment history is one of the major factors which is considered while calculating your CIBIL score. Even one default in payment will be tracked by the credit bureaus and it is not possible to remove your bad credit history. However, you can check if any incorrect negative accounts are added to your history and resolve them.

The best way out from a bad credit history is to build your credit score to acceptable levels by timely payments of your existing debt, learn more about credit improvement and clearing disputes in your credit history.

How to remove a loan settled record from my CIBIL report?

The credit report shows a settled status for a loan when the customer partly pays the dues. Even though the settlement flag does not hold any impact on the credit score, each bank/NBFC has its own policy of viewing the “settled” status and decide and will decide on the customer’s future loan applications.

In order to remove the settled status from the bank, you must pay back all the dues and close the loan. I would suggest you approach the bank and offer to fully pay the accrued dues and penalties if any and close the loan. Once the dues are paid, the lending institution shall send the status on this loan loan to CIBIL as “closed”.

How many days will a default payment show in CIBIL?

Every credit activity you do is recorded in your credit report. Once you default in your payment, it gets recorded in your report and cannot be removed from the credit history. It could stay for over 6 to 8 years on your report. The timeline varies depending on the policies of the credit bureaus.

What you can do to reduce the damage is to make sure the defaults are fully paid and showing satisfied. You may not be able to change the past; however, you can make your future better by being responsible with your credit activities.

let me explain this with an example :

Say there is this card “X” which has a limit of 50,000 and a billing cycle of 50 days. This card was issued to you say on the 1st day of the month. Now you will start spending, you can spend anything from Rs 1 to Rs 50,000. After about 30 days your bill will be generated. This will include all the expenses you have done so far. Now you don’t have to pay it instantly, you got another 20 days to pay it (since your billing period is 50 days).

the day when your bill is generated will also start the next billing cycle, so all the amount you spend here on will reflect on your next bill, that is essentially another 50 days for you to pay back.

Now like already stated before always try to make the full payments each month before or on the due date. paying the minimum amount will just exempt the late fine not the daily interest. Also remember it takes at-least 3 day to process your payment so keep that in mind and make the payment a little earlier than the actual due date.

Having a credit card is OK, but please use it wisely because nothing is free in this universe everything has terms and conditions. Never fall into the credit card debt cycle, that’s like a bottomless pit of financial desolation.

Can I get a personal loan with a CIBIL default?

Getting a personal loan with a CIBIL default is difficult, but possible. Personal loans are unsecured loans which do not require any collateral or mortgage- hence, lending institutions seek some other form of assurance that the loan will be repaid. Your CIBIL Score, which is a quantification of your financial trustworthiness based on your past repayment history is what they assess in this regard. Now, with a past instance (or instances) of repayment default, lenders get wary of granting a loan (especially an unsecured loan) to an individual. Hence, you will have to step very carefully at this stage as a rejected personal loan application can further reduce your CIBIL Score.

To get a personal loan with a CIBIL default, you will have to ensure that your present monthly earnings are high. With increased income, chances of missing payments and defaulting get lowered. You can also apply for a joint personal loan with your spouse or any other closely related family member who has a good CIBIL score; their higher CIBIL Score acts as a compensatory factor for your application.

Alternatively, you can also look for lending institutions which grant personal loans to individuals with a low credit score. However, you need to be informed here that such lending institutions charge a much higher rate of interest. It is best to stick to credible lenders like banks and NBFCs which have a good credit rating.

After how many years does CIBIL score get refreshed?

There is no specific timeline for your credit score to get refreshed. In fact, every time you make any payment on your credit card or loan, or engage in any other financial activity, your score gets updated in your credit report.

In case, there is a ‘default’ mark in your credit report, it will reflect on your credit report for seven years. However, if you continue to make your payments on time, it will take few months for the remark to get removed. If you manage your finances properly, the default mark will gradually disappear. 

 
 

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