Know Written Off Meaning in CIBIL and How to Remove it from Your Credit Report

 

The ‘Accounts’ section of your Credit Information Report (CIR) contains details of your credit accounts, like loans and credit cards. The lender may update these accounts with an appropriate status. Two such statuses are ‘Written Off’ and ‘Settled’. 

 

Both of these can reduce your eligibility for loans and credit cards. Since this status stays in your credit history for up to 7 years, it can make it difficult to access credit in the future. 

 

You will see this status in your credit report if you have not been able to repay your loan in full. However, you may also see this status if there is an inaccurate reporting of credit behaviour or if there is a fraudulent loan in your name. 

 

Sometimes, closed accounts may also be mistakenly marked as ‘Written Off’ or ‘Settled’. In such cases, it is crucial to know how to remove the ‘Written Off’ status from the CIBIL report.

‘Written Off’ status against a loan or credit card mentioned in your CIBIL report is an indication that you have not made full repayment. This is usually after non-payment for a certain period (typically more than 180 days).

 

In such a case, the lender writes off your loan from their books. During this period, you are still legally required to repay the outstanding amount. The lender will report the issue to TransUnion CIBIL. 

 

After this period, the financial institution may get in touch with you and agree to a one-time settlement. This is usually of a lesser amount than what is due. You pay the agreed-upon sum to the lender, and the status changes to ‘Settled’.

 

Here are the implications of having a ‘Written Off’ or ‘Settled’ status:

• This negative remark will have a negative pull on your credit score, reducing your score by 50 to 100 points

• Since this status shows irresponsible financial management, you may face difficulty in securing another credit facility in the future

• Even if a lender provides you with a loan, the interest rates will be much higher than the rates available for customers with good credit scores

If you find any inaccuracies in your credit report, you can raise a dispute with TransUnion CIBIL to get it corrected. If you are sure that there are no errors, here is how to remove the ‘Settled’ status from the CIBIL report:

• Get in Touch with Your Lender

Contact your lender to know the exact amount that you owe them.

• Come Up with a Repayment Plan

Discuss and negotiate with the lender about an effective way to repay the loan.

• Repay Outstanding Balance

Ensure that you follow the repayment plan with discipline in order to clear your ‘written off’ status.

• Obtain No Dues Certificate

Once you have cleared your dues, get a No Dues Certificate (NOC) from your lender as proof of full repayment of your loan.

• Raise a Dispute If the Report Is Not Updated

The lender informs CIBIL about your full loan repayment, and your CIR reflects it within a few days. Review your CIBIL report and score in a few weeks to ensure this is done.

If your report is not updated, raise a dispute with CIBIL for your ‘Written Off’ status. When raising a dispute, remember to show proof of repayment of the loan for quick resolution.

Getting a ‘Written Off’ or ‘Settled’ status removed from your CIBIL report can be a lengthy process. Moreover, rebuilding your credit after getting this status removed is also a gradual process. To avoid such issues, take these proactive measures:

• Before applying for a loan, assess your ability to repay it

• Research different loan options to get a loan that best suits your needs

• Consider opting for a loan that offers low interest rates with longer repayment tenures to make your EMIs more manageable

• Manage your budget by avoiding unnecessary expenses in such a way that you can pay all your dues on time

• Contact the lender and communicate your issue if there is a risk of defaulting on loan repayment, and come up with an alternate plan