September 16, 2024 · 11 mins read
Santosh Kumar
Maintaining an STD in Your Credit Score is necessary in the present economic conditions, where people constantly take out credit or loans, whether personal, home, vehicle, business, or even credit cards.
The bank or financial institution that lends generally refers to the person's past borrowings through the CIBIL credit score report and credit score to determine the person's lending capacity. The lender fetches the individual's CIBIL report with details like full name, PAN, and date of birth. The Credit score details are wholly shared in the report with terminologies like DPD, SMA, LSS, DBT, or others, among “What is STD in Your Credit Score” is one such term.
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Credit score, also termed as CIBIL score or STD in Your Credit Score, helps determine creditworthiness and the capacity to repay the loan taken. Creditworthiness here means the “probability of default” based on their credit history. The credit score ranges from 300 to 900, with the higher being the better, as a higher score increases the chances of approval of your loan application.
1. 750 or above: This is considered an excellent score, and credit institutions consider it to be the least risky. Loan approval is quicker with favourable commercial terms.
2. 700 to 750: This is considered a good score and a bit riskier, but the chances of getting favourable terms are high. Interest rates can be higher.
3. 650 to 700: This score is classified as average, and credit institutions might ask for additional securities to mitigate risk like any guarantor.
4. 600 to 650: This is not considered a good score and indicates many previous defaults or overdue payments. The chances of getting credit are very low.
5. Less than 600: This credit score shows very poor credit health and credit institutions will only accept loan applications.
Lenders do not prefer a credit score lower than 650 in most situations, or they provide stringent loan terms with additional guarantees as security when the credit score is low. One should maintain a good credit score to maintain one's credit health. In some cases, one might find their credit score as 'NA' (Not Applicable) or 'NH' (No History), meaning the person has had no credit history or does not have enough credit history to determine the credit score.
Maintaining a good credit score is essential for multiple benefits, like better chances of approval than those with a lower credit score, and a high credit score shows less risk of default considering the person's payment history. Good credit scores can also benefit from lower interest rates on different kinds of loans or credit cards. People with good credit scores also get access to premium credit cards with rewards like loyalty points, exclusive memberships, and other different types of access. Thus, it is essential to keep your credit score high. Knowing and keeping track of the STD in Your Credit Score by fetching the CIBIL credit score report is recommended. One should remember not to make credit score enquiries for a short duration, as credit inquiries are tracked and recorded even in the report.
Read More: How To Read Your Credit Report
Many components are an essential part of the CIBIL report that impact the credit score, some positively and others negatively. STD or Standard is one such positive indicator of the individual's credit score.
STDs are of significant importance in the CIBIL report. STD is short for "Standard" in the CIBIL Credit score report. The credit score determined for a borrower is based on multiple factors and the status of lending reported for the account. STD indicates a positive outlook on the person's credit score. It shows that the individual has made on-time repayments, primarily within ninety days from the due date. This increases the chances of loan approval by the lender, and one can also negotiate for better interest rates from the lender when a good credit score report is available. STD thus shows positive remarks for a person's credit score report.
Read More: CIBIL Vs Experian
So What is STD in Your Credit Score that is mentioned in the DPD (Days Past Due) Matrix in the month where no delayed payments were made. It is generally mentioned as "STD" or "000" when the borrower makes timely repayments. DPD and the number of days are mentioned when payment has been delayed. For example, 'DPD 25' means that the borrower's payment has been delayed by 25 days.
DPD should be avoided as this negatively impacts the credit score, unlike STD. Borrowers can ensure STD by making timely repayments for a healthy credit score. A few other terms that are a part of the report are as follows:
1. XXX - This appears in the credit score report where the bank has not shared details for that period. The bank can be approached for more information, and the person can ask the bank to report the on-time repayment to improve the credit score.
2. SMA (Special Mention Account)—This STD in Your Credit Score indicates a potential risk of the account. “SMA” indicates that the account has signs of being categorized as NPA within 90 days. This indicates that you should keep track of your credit health to avoid a negative impact on your credit score.
3. SUB (Sub-Standard)—This is a higher delinquency than SMA reported in the credit score report. It is reported when the repayment or instalment is overdue for over 90 days.
4. DBT (Doubtful)—When the Substandard reporting mentioned in the person's report stays delinquent for a year, it is categorized as "Doubtful." DBT is a negative indicator of the risk of default, which cautions lenders.
5. LSS (Lender Settled Status) - This is indicated in case of a write-off of the account by the lender. In this case, dues are considered unrecoverable, negatively impacting your credit score. Generally, in such cases, partial resolution of the debt takes place. Thus, this should be avoided by making timely payments.
It is highly recommended that people make regular repayments on time and maintain their credit health for a good credit score. It is never too late to improve your credit score and know more about “What is STD in Your Credit Score”. As mentioned earlier, "xxx" might be mentioned for some period when the lender does not report the details. In such a case, one might have STD reporting, and they should ask the lender for the reporting of that period so that the CIBIL credit score report is updated and it gets reflected the next time the report is fetched for enquiry.
Negative situations reported, like settled or default, significantly impact the credit score. STD, however, shows a good standard payment history of the individual over that particular period of time and is an advantage when present in the credit score report.
Read More: How to Improve CIBIL Score after Default
The major factors impacting the STD in Your Credit Score of an individual are as follows:
Missing the due date for payments on existing loans significantly affects the credit score. Lenders closely monitor and report any overdue payments highlighted in the credit score.
Credit should be utilized diligently. An increase in spending on credit cards does not reduce the credit score, but one should remember that high utilization increases the burden of repayment.
Unsecured loans like credit cards are easily accessible and have much higher interest rates compared to secured loans such as home loans or vehicle loans, which have lower interest rates. Lenders check the forms of existing loans and apply the process of how is credit score calculated in India and utilization to determine the current obligations in case of default.
If a person makes a credit application quickly or has been sanctioned a new credit facility, the lender will view the application with increased caution. New credit of shorter duration indicates excessive borrowing capability and can negatively impact the credit score.
Read More: Tips to Improve Your CIBIL Score Fast
Below listed are the steps to follow to report STD errors in CIBIL Report:
1. Visit the official CIBIL website.
2. Go to “Dispute Resolution”
3. Please complete the Dispute resolution form with your details. After you complete the necessary information, the form can be submitted electronically.
4. CIBIL will share the dispute or query with the lender who has reported for verification and will “flag” the account as disputed.
5. If the lender finds any error in the report, the bank or financial institution will revise it, and the CIBIL credit score report will be updated accordingly.
Read More: Get Loan with Low Cibil Score
So, in a nutshell, the answer to: What is STD in Your Credit Score?- CIBIL report is an important document and plays a crucial role when a person must take a loan. A credit score is determined based on many aspects like credit history, repayment capacity or the number of credit inquiries. Lenders, whether banks or other financial institutions, look keenly at the Credit score and the CIBIL report before deciding and approving a loan and finalizing the interest rate. One should understand the credit score computation and its importance, including different parts of the report like DPD, LSS, and STD, as this is crucial for maintaining a healthy financial profile.
A credit score is essential, but the other parts of the CIBIL report are also important, such as the positive and negative indicators in the report apart from the credit score. As we have seen, STD presents a good indication of normal payment behaviour or can be said to be a repayment commitment of the person and is something looked for by lenders. People should make informed decisions while taking credit in any form to maintain a healthy credit score. Credit can be used whenever required and even helpful in financial emergencies. One can maintain a good credit score and improve one's credit health for emergencies or regular lending when needed.
Read More: How Much Cibil Score is Good?
What is STD in cibil report?
STD stands for Standard. It is a positive indicator in the cibil report stating that the individual has made timely payments, which is within 90 days from the due date.
Where can I check for the “STD” reporting in my CIBIL report?
You can get the details about the STD in Your Credit Score reporting by looking into the DPD table mentioned in the CIBIL report. For the period, it is mentioned as "STD," which means Standard, and it indicates a positive outlook for on-time repayments.
How often should one take a loan from a bank or other financial institution?
A person should take a loan according to their requirements, whether a personal loan, home loan, vehicle loan, or any other kind of loan. The amount of credit taken also impacts a person's creditworthiness.
If a person has a credit card from any bank, what percentage utilization is recommended to improve the credit score?
If you regularly use your Credit card, please keep the monthly average utilization around 30-40% of the total limits available. The lender generally does not consider high utilization ideal.
What is the impact of being overdue on a person's credit score?
A delay in payment by someone negatively affects the person's credit score. They might face trouble while applying for a loan or credit from any lender, and the lender may charge higher interest or add some additional commercial terms. Maintaining a healthy credit score by avoiding any overdue is highly recommended.
What are the ways to improve my credit score, as given in the CIBIL report?
Always keep systematic track of future payments due so that repayments are made on time. Carefully use your limits as and when required. Periodically check your STD in Your Credit Score to stay updated.
What does “xxx” show in the table mentioned in the CIBIL report?
"xxx" mainly shows that no reporting has been shared by the lender for that particular period; hence no data was available to provide status about the same.
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