How to Change the Written-Off Status and Clean CIBIL Record

To develop a healthy CIBIL record, it is crucial to understand all of its associated elements and terms. A CIBIL report contains details of an individual's credit history such as the number of accounts, name of the lender, loan amount, as well as the payment history. If you have ever read your CIBIL report, you might have come across the term "Written-off". This term is detrimental to the health of your CIBIL score, as it means that the borrower was unable to pay their dues on a given loan or line of credit, and the lender had to ‘write-off’ the loan amount. However, what if we told you that you can get this ‘written-off’ tag expunged to avoid further damage to your CIBIL record and credit score.

Having a clean CIBIL report is vital to secure new or additional credit. However, there may be times when the report may have some errors due to poor financial management, incorrect information, fraudulent usage, etc. Hence, it is advisable to do a CIBIL report check, i.e. credit score check, once in six months to stay updated. If you have the ‘written-off’ tag marked on a loan/credit account on your CIBIL report, you first need to check whether it is correct. In some cases, a ‘closed’ account can be marked as ‘written-off’ if updated incorrectly. Such errors need to be rectified as soon as possible by filing a dispute online with TransUnion CIBIL.

There are different types of errors that may occur in your CIBIL report. Some of the common errors include the following.

 

• Wrong personal information:

There may be errors in personal information such as your name, your gender, date of birth, address or contact information. The PAN or Aadhaar number may also be incorrect in some cases.

 

• Delayed updation of balance:

This is one of the most common errors in CIBIL reports. The outstanding balance in your name may not be updated soon enough. In this case, loans you have actually repaid may still be reflected as overdue.

 

• Incorrect balance:

Sometimes, the outstanding balance may be updated, but there may be errors in the updates. Due to this, your CIBIL report may show an incorrect balance for your loans or your credit cards. It’s easy to miss these errors, so keep an eye out for them.

 

• Errors in outstanding loans:

This section is often prone to mistakes. For instance, the amount of loan taken or the amount of loan due may not be accurate. Alternatively, some loans that you have not taken may be shown in this section, or some loans you may have actually taken may not be reflected.

 

• Duplication of accounts:

Lastly, in some cases, there may be more than one account registered in your name. If this is the case, bring it to the notice of the concerned authorities right away, and ensure that your duplicate account is closed to avoid bringing down your CIBIL score.

The following are the steps for CIBIL Dispute Resolution:

 

• Step 1: Go to www.cibil.com, and create an account. If you already have one, simply sign in.

• Step 2: Select the ‘Credit Reports’ option and click on ‘Dispute Centre’ before selecting ‘Dispute an Item’.

• Step 3: Fill in the online CIBIL dispute form and choose the relevant section.

• Step 4: Select the ‘Dispute Type’, enter a value if you are disputing data inaccuracies, and click on ‘Submit’.

Once the CIBIL dispute form is submitted, TransUnion CIBIL will verify the information with the relevant lender, and the status will most likely be updated within a month.

Debt settlement is a type of agreement made between the lender and the borrower that makes it easier for the latter to clear their dues. Typically, the lender might reduce the debt by providing a concession on the interest payable. The debt settlement amount and process is based on the type of credit that was availed. Once the agreed amount is paid, the lender would mark the account as "Settled" in the CIBIL report. While settlements also reflect poorly on your credit score, it is better off than the ‘written-off’ status.

While it is certainly beneficial to settle a loan account sooner than later, there are some key questions that you need to ask your lender before you settle the debt. Here are some such essential questions.

Does your lender accept loan settlement?

First things first, you need to check if your lender allows borrowers to settle their loans. Most lenders will offer this option if you are able to prove that you are entirely bankrupt and are unable to repay the loan as per the original terms and conditions.

What is the non-repayment period?

Once you have established that your lender does indeed allow loan settlement, you need to check what the non-repayment period is. This is essentially the period during which you need not make any repayments. The longer this is, the better.

How much of the outstanding amount will you have to repay to settle?

After the non-repayment period is over, you will have to pay a percentage of the outstanding amount as a lump sum to settle the loan. Negotiate this amount with your lender, so you can afford the process of loan settlement. The lower this percentage, the better.

A debt settlement essentially indicates that you were unable to repay your entire debt as per the schedule. Therefore, loan or debt settlement is bound to affect your credit score and your credit report adversely. It can bring down your credit score and reduce your creditworthiness.

 

That said, loan settlement is still a better option than writing off the entire loan amount. This is because in the former case, you at least repay a portion of the outstanding amount as a lump sum amount.

Post debt settlement, lenders might be hesitant to offer you unsecured loans as you were unable to pay your previous dues in full. However, there are chances of availing a secured loan by pledging an asset as security with the lender. Also, note that a secured loan can raise your CIBIL score faster if you make timely repayments. You also get access to additional benefits like easy loan approval, lower rates, minimal paperwork, etc.

To clear the “Settled” status from your CIBIL report, you need to pay the outstanding amount on your loan and get a NOC (No Objection Certificate) from the lender. The next step is to raise a dispute on the CIBIL website. The credit bureau will confirm the update with the lending institution and change the status from “settled” to “closed” within 30 days.

There are certain parameters that CIBIL uses to assign credit scores. These parameters are crucial in rebuilding your credit history in the most desired way. They are as follows:

Understanding the elements of your CIBIL record and working on them will help you build your credit information report. It is crucial to have a clean CIBIL report or you might have a tough time availing a loan or line of credit in the future. A score of 750 and above is excellent and gives you the power to negotiate the terms of the loan with the lender. Check your CIBIL report and CIBIL scores every six months to understand your financial standing. You can get a free CIBIL score check online and a Credit Health Report using the Bajaj Markets app to get more insight into your finances.

 

If you have a healthy CIBIL record, you can easily avail an instant loan online with any financial institution. At Bajaj Markets, you can avail a high loan amount of up to Rs. 50 Lakhs with interest rates starting from as low as 10.49% per annum. If you meet the loan eligibility criteria, the online loan process becomes even easier and the loan amount gets disbursed without delays, post the loan application approval. Visit Bajaj Markets, now!