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Process for removing name from CIBIL Defaulters List

As a borrower, it is imperative for you to know that there is no Defaulters List as such with CIBIL authorities or any other credit bureaus operating in India. If your application has been rejected for a loan or credit card, it is probably because you might have a low credit score which is caused by your poor record of repayments. Banks and other financial institutions do not want to give credit to customers who have a history of missed or late repayments. Since there is no defaulter list maintained by CIBIL or any other Credit Rating Agency one should not just sit back and relax. You can follow the below mentioned pointers to maintain and increase your credit score:

  • Examination of Your Credit Report : Make a careful examination of your credit history, this will help you understand your mistakes and will also ensure that your details in the report are flawless and correct.
  • Clear Off Your Dues : The best way to improve your credit report, is to clear off your all outstanding credit. In case you have any financial limitation, you should speak with your lenders in advance and make sure you have a way out. Once your bills are cleared, wait for 3 months and again check your credit report.
  • Pay in Time : A delay in the payment of the loan instalment has negative impact on your credit history. If you desire an improvement of your credit score or if you want to maintain your good score, you should start paying your monthly instalment before the due date.
  • Spend as Per Your Credit Limit : Try to spend no more than 30% of your credit limit. This one move will always keep your credit score healthy.
  • Take Loans One at a Time : If you apply for multiple loans in the same go, you will only show your credit hungriness. Applying for short duration loans is not a good idea either. Therefore, you should apply only for one loan at a time. This makes for easy payments and presents a higher possibility of getting the loan approved.

Impact of low CIBIL Score on loan approval

CIBIL is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark.

The only way you can ensure that you are not rejected for a loan/card is by improving your CIBIL credit score to 750 or above to show that you are a responsible borrower who pays off debt obligations on time. You can use the tips given above to improve your score and demonstrate that you are a financially responsible borrower. It can take 4-12 months to improve your score, depending on your individual credit situation, but the reward of having a good score, technically means a lifetime of quick and easy access to credit.

FAQs on Removing Name From CIBIL Defaulters List

How to improve your score and not get on the Defaulters List?

A good repayment track record: It does not need to be said that a good CIBIL score starts with timely repayment of credit. Irrespective of whether you are an individual or a company with commercial interest, the credit rating of your company can be improved by timely repayments. Maintain a low credit utilisation ratio: Very much like it is with individuals, a better rate of credit utilisation indicates that the company is credit hungry, and this will bring down your credit rating. Length of Credit: Individuals and Companies that have a more established track record of repaying credit have a better ranking than that of start-ups. These are thus likely to get a simpler, more effective access to credits. You can improve your credit ranking, by being patient in bringing about length of credit and by repaying your credit diligently. Pay Complete Bills on Credit Cards: You can either make a minimum or entire payment for credit card bill. Going with the second option will keep you off the credit default. Displaying Credit Hunger: Continuously applying for loans will affect your CIBIL score. Only take a loan when you absolutely need credit.

What is Credit Repair?

Credit repair is undoing of mistakes and other inaccuracies on your credit report. These are not your fault and should ideally not affect you. However, since it is your credit record, having a bad remark on it will certainly prove to be negative for your credit requirement.

For how many years does CIBIL keep track of defaulters?

The Credit Information Bureau of India Limited gathers and syncs all information to make a Credit Information Report containing an individual’s details of credit and defaults. This record stays with them for minimum of 7 years from the date of first late report. Kindly note that CIBIL cannot delete or modify your records.

What to do if my loan is rejected due to my name in CIBIL defaulter list?

If your loan is getting rejected due to a poor CIBIL score, then you could start with clearing off all dues. Once the dues are cleared, the default will be eliminated from the Credit Information Report. This is one month to a maximum of two months’ time. If after waiting out the due period, the record has not been updated, you will have to file a grievance with the bank. Beyond this, you can write to the RBI regarding your grievance.

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