December 12, 2024 · 10 mins read
Santosh Kumar
CIBIL or TransUnion CIBIL is one of India's four Credit Information Companies (CICs). Its full form is Credit Information Bureau India (Limited), perhaps the most prominent and well-known of the four India credit bureaus. The other three are Equifax, Experian and CRIF Highmark. CIBIL is the oldest among them and perhaps that is why the most trusted one too.
As the name itself tells, the credit information companies are entrusted with the task of collecting and recording all credit related data and information of each individual. This includes all their details about loans, credit cards, etc. For instance, the credit bureaus reach out to banks, credit card providers, other lenders and financial institutions to procure data such as an individual's repayment history, the number of credit enquiries they have made in the past, the number of loan rejections and approvals, the ratio of secured to unsecured credit, any loan settlements, any default or pending payments, etc.
Now, you might be wondering what these credit bureaus do with such information. The credit bureaus use each individual's data to create a credit report and generate a credit score for them. Let us understand both these terms better and in more detail.
The credit bureaus assess each individual's credit behaviour, and based on this assessment, a detailed report of how they have handled available credit in the past is created. The credit report is used by banks and other lenders when people apply for loans, credit cards, mortgages, etc. Looking at their past credit handling gives banks an idea of the amount of risk they would be taking by granting a loan, credit card, etc, to a particular applicant. This is why it is crucial that you maintain a good credit record so that prospective lenders can trust you and see you as creditworthy. For instance, if a lender sees that you have defaulted on a loan in the past, how can they trust you to repay their money in case they sanction a loan to you?
One of the most important elements of the credit report is the credit score. Based on all the aforementioned factors, each person is assigned a credit score by each of the credit bureaus. This score will always fall between the numbers 300 and 900. A score lower than 700 is considered poor and insufficient by most banks in order to approve a credit application since it reflects irresponsible credit handling on the applicant's part. A score above 700 suggests that the applicant is a responsible borrower, and the lenders are unlikely to incur a loss if they give money to him.
Having a good credit score and a healthy credit report is essential if you wish to get any form of credit, and that too on favourable terms and conditions.
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Now that you know how important it is to have a good CIBIL report and credit score, you must make any improvements that might be needed in your report and score. One of the best ways to do this is to remove bank accounts from CIBIL.
Let us discuss the type of loan accounts that might be seen on your CIBIL report and how you can remove them:
1. If you have taken an active or ongoing loan, you are still in the process of repaying it, and there are installments left to repay.
2. To remove active loan accounts from your CIBIL, you need to repay the loan completely. Repaying all your active loans as soon as possible is always a great idea because it reduces the number of loan accounts in your CIBIL report and also shows you as a financially stable borrower who can be trusted with credit.
3. Once you have paid off the loan, make sure you get an NOC from your lender for confirmation and request them to update it with CIBIL (although most lenders do it on their own).
4. This should remove the loan account from your CIBIL. If it is still flashed as an active loan in your records, raise a dispute with CIBIL on their website, and it should be resolved within 30 days.
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1. A loan settlement occurs between a lender and a borrower when the latter is unable to pay off the amount he initially agreed upon. In such a case, another lower amount is decided by both the lender and the borrower that can be paid, and the loan will be settled. Settlements reflect poorly on your credit report.
2. To remove a settled loan account, you must pay the outstanding balance to your lender and get an NOC from them.
3. Once CIBIL receives this information from you or your lender, it will update the status of your loan account from 'settled' to 'closed', thus removing it from CIBIL.
1. A loan will be labelled as 'written-off' on your CIBIL report if it has been more than 90 days since your payment has been overdue and the lender has given up on receiving payment from you. The lender removes it from their balance sheet.
2. A loan being written off impacts the borrower's credit score negatively and should be avoided at all costs.
3. If you have a loan written off and want to remove it from your CIBIL profile, you must repay the entire amount as soon as possible.
4. Once done, get a No Dues Certificate from the lender confirming the loan repayment. Your written-off status should be removed from your CIBIL report within a few days. If the loan account is still labelled as written off, you can file a dispute on the CIBIL website to resolve the issue.
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1. When you make a loan enquiry it also gets reflected on your CIBIL report and impacts your CIBIL score. A loan enquiry is when you apply with a lender to get a loan. It is called a hard enquiry or a hard pull.
2. In case you check your CIBIL score, generally, it won't be counted as a hard enquiry.
3. You cannot remove a loan enquiry from your CIBIL report. It will be removed by itself after 2 years.
1. If you have been unable to repay a loan, the lender can take legal action against you. This is called filing a suit against you and reflects very poorly on your CIBIL report.
2. To remove such a loan account from your CIBIL, you first need to pay back the lender the entire amount owed, including any late payment charges.
3. Try avoiding making a loan settlement to get rid of the suit. As you already know, it has negative impacts on your CIBIL report and score.
4. Your loan account will be shown as closed once you have made the full payment and obtained an NOC.
5. If it is not updated after the recommended waiting period, make sure to file a dispute with CIBIL and resolve the issue as soon as possible.
These are all the different kinds of loan accounts in your CIBIL report and the various ways in which you can remove them. Sometimes you might see 'written-off', 'settled, or even loan suits despite any mistake or payment delays from your side. This can happen due to a mistake made by the lender or an error on the part of CIBIL itself. In such a case, make sure you reach out to CIBIL as soon as possible and resolve the issue to avoid any future inconvenience. You can file a dispute on their official website, www.cibil.com.
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Your CIBIL report contains all information about your credit behaviour. This also includes each and every detail about your loans. They include all sorts of loan accounts - loan accounts that are active and ongoing, loan accounts that the lender has written off, loan accounts that have been settled, loan accounts that have a suit filed because of late payment and even the number of loan applications a person has made. Except for the last one, all of these loan accounts can be removed from your CIBIL report. Loan enquiries stay on your CIBIL report for a period of 2 years and are then removed by CIBIL itself. You cannot do anything to remove them.
The first thing you are required to do in each case is to repay everything that you owe the lender. This includes the principal loan amount, the interest accumulated, and any charges that might have been levied due to late and delayed payments. Once done, you must get an NOC from your lender and inform CIBIL about the same. The lenders also inform the credit bureaus themselves, and your loan account shall be closed within a few days.
If your loan accounts are not closed and removed even after following the given steps, or if accounts exist because of a lender's or CIBIL's error, you can always visit their official website—www.cibil.com—and file a dispute. The issue should be resolved within 30 days.
1. What does the write-off mean on my CIBIL report?
If a loan account is seen as written off on your CIBIL report, it means that you have not been able to repay for more than 90 days, and the lender has removed your loan account from his balance sheets. In other words, they have given up on getting a repayment from you. Written-off status affects your credit report poorly and lowers your credit score. If you have it on your CIBIL report, you must make efforts to remove it.
2. Will a loan settlement impact my CIBIL score?
Yes, a loan settlement will impact your CIBIL score, and the impact will be negative. It means that it will take your CIBIL score lower. A loan settlement shows that the borrower is incapable of repaying his dues, which further impacts your loan and credit applications.
3. Can I remove a loan enquiry from my CIBIL report?
No, you cannot remove a loan enquiry from a CIBIL report. A hard enquiry will remain on your account for two years and then be removed.
4. How much CIBIL score is needed for a loan?
There is no fixed CIBIL score that all lenders need to provide a loan to an applicant. However, most see 700 or above as a good enough score and readily provide a loan to a borrower with such a score. With a score lower than 700, it might be difficult for an applicant to get a loan application approved, and even if they get the loan sanctioned, they will not be able to enjoy favourable terms and conditions.
5. My loan account is labelled 'settled' in my CIBIL report even though I have not settled it. What should I do?
If you have not made a loan settlement but your CIBIL report is showing a 'settled' status, this can happen because of a mistake made by your lender or an error made by CIBIL itself. It is crucial that you get this status removed as soon as possible. In such a case, you should visit the official CIBIL website, www.cibil.com, and raise a dispute about the problem. Usually, the issue gets resolved within 30 days. After that, the settled status will be removed from your account.
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