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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.
When you are unable to make payments against an outstanding loan or credit card balance for more than 180 days, the account is considered as delinquent, and the lender is authorized to “write-off” the amount in question. The lender proceeds to report this incident to the credit bureaus, and CIBIL mentions it as “Written off” on your CIBIL report. A clean written-off status in your CIBIL report is a dark mark on your credit history. Delinquency reflecting in your CIBIL status is detrimental for the approval of new loans or credit cards. Potential lenders will consider you untrustworthy as you have not paid dues on your past loans or credit cards. Thus, you might be denied credit.
Removing a clean written-off status in your CIBIL report is difficult but not impossible. Surprisingly enough, you might not even realize that one of your accounts have been written off. A friend of mine recently shifted base to a new city and changed his phone number. Amidst the clamor of relocation, he forgot to make the payment for one of his oldest credit cards. The lender might have tried to reach him on his phone to remind him of his dues, but the change in phone number rendered their efforts fruitless. His account was written off, and he had no clue! Only when his application for an auto loan got rejected did the poor fellow realize what had happened. A tiny error arising out of unmindfulness had a domino effect of severe magnitude — his plans of buying a car and a house got derailed.
You must have agreed on the sum to be paid to the lender over a specific period of time while signing the settlement deal. Most likely, the agreed amount would be far lower than the original outstanding dues. However, you must ensure discipline in your spending routine to save enough to repay the settled debt on time. The general advice would be to cut down the monthly spends by a few percentages till the time the debt is paid off, if not forever. As soon as you repay the whole agreed amount, the lender will report the same to CIBIL as settled, marking a much-needed change in the credit status from written off.
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.
1. Keep an Eye on Your CIBIL Report
While most credit users are conversant with keeping tabs on their CIBIL scores, very few bother to monitor their credit reports. You can buy your CIBIL report directly from the bureau. A single purchase costs you Rs.550 whereas a yearly subscription is much more economical and costs you Rs.1200 for a report every month.
2. Check the CIBIL Status of your Accounts
Carefully scrutinize the document for discrepancies or potential red flags. If you are confident that you have identified an error or inaccurate information in your credit report, you must immediately initiate the dispute resolution process through the CIBIL website. In such a scenario, CIBIL will check with the concerned financial institution to determine the authenticity of your claim. You can expect to hear back from CIBIL in 30 days. You might want to contact the bank directly and point out their mistake as well. This will expedite the process considerably. If your claim is legitimate, CIBIL will remove the error and restore your CIBIL report.
3. Check the Payment History of each of your Accounts
Go through the ‘Days Past Due’ section carefully. Anything apart from 0 or X should be treated as a caution, and you must act upon it immediately.
4. Get a NOC from the lender
Once you have paid off the settlement amount, obtain a NOC from the lender, stating that you no longer owe anything to them. Request the lender to post the same NOC report to CIBIL, asking them to update your CIBIL status. This should remove written-off status in your CIBIL report in some time.