Knowing how to remove the ‘written-off’ status from the CIBIL report is crucial to increasing your probability of securing a loan. This is because loan default may lead to rejection of your loan applications.
A written-off status in a CIBIL report means the following:
- You have not paid your EMIs against the borrowed amount
- You did not make any repayments for 3 months
- Your credit score and future borrowing capabilities may be affected
Read on to learn more about the written-off status and ways to avoid loan defaults.
What do you mean by a Defaulters list?
Remember these vital facts:
- The credit bureaus don’t maintain a list of loan defaulters
- Credit bureaus only compile borrowers’ credit details and make them available to lenders to assess their creditworthiness
- The Reserve Bank of India (RBI) maintains a list of wilful defaulters with a collective outstanding credit amount of more than ₹25 lakhs
The following practices fall under the wilful default category:
- Deliberate non-payment of the dues
- Siphoning off of the funds
- Misutilisation of proceeds
- Misrepresentation of records
- Removal of securities without the bank’s knowledge
- Fraudulent transactions
How to remove a defaulter account from the CIBIL report?
If you default on loan repayment, these two scenarios may arise:
- The lender may file a lawsuit in the civil court
- Your name will be visible on a public database on default of loans of more than ₹25 lakhs
Thinking of how to remove a ‘written-off’ status from a credit report. Simply follow these steps:
- Contact your lender for an out-of-court settlement
- Pay the outstanding balance
- Once you settle the loan, the lender will withdraw the case
- The lender will update TransUnion CIBIL about the loan repayment
- Your credit report will reflect the changes in some time
Unable to pay the entire amount? Here’s how you can settle your loan:
- State the reasons behind your inability to repay the loan in court
- The bank may allow you to pay a settlement amount to clear your dues in such a case
How to avoid a write-off?
Make sure to follow these simple tips and tricks:
- Plan Before Taking a Loan: Before you apply for a loan, assess your ability to pay your monthly instalments
- Evaluate Different Offers: When availing of a loan, compare different loan options and choose the one that offers the lowest rates and longer tenure options
- Carefully Read the Agreement: Prior to signing on the dotted lines of the loan agreement, check if the lender has included any hidden charges
- Manage Your Budget: Create a budget and stick to it to curb unnecessary expenses
- Speak to the Lender: If you think there is a risk of loan default, you can contact your lender to explain your hardships and reach a solution
Can default status impact loan approvals?
Loan defaults in your credit report impact approval in these ways:
- Lower Chances of Getting a Loan: A loan write-off may be detrimental to the probability of getting a loan
- Higher Interest Rates: Even if a lender decides to provide you with a loan, they may charge high-interest rates
As there’s no list maintained by credit bureaus for individuals defaulting on loans, you don’t have to stress thinking of how to remove your name from the CIBIL defaulter list.
Certain lenders provide loans even to those new to credit or with low credit scores. For instance, Fibe’s proprietary alternate credit scoring mechanism helps new customers get an Personal Loan of up to ₹5 lakhs. Download the Fibe Personal Loan App to enjoy quick loan sanctions with a simple application process and minimal paperwork.
FAQs on How to Remove a Written-Off Status from the CIBIL Report
How many years will CIBIL keep a record of defaulters?
The record remains with TransUnion CIBIL for a period of seven years.
Can we remove a closed account from CIBIL?
There can be two scenarios:
- You will have to wait for the closed account to fall off the CIBIL report after seven years if the details are correct
- If the details of a loan account are inaccurate, you can raise a dispute to get it removed
How can I remove my written-off status in CIBIL?
To remove the written-off status in your CIBIL report, you will need to follow these steps:
- Repay the outstanding balance
- Once you clear your dues, the lender will update the information with the credit bureau
- The credit bureau will update your credit report in some time
How can I delete my CIBIL history?
If you are wondering how to clear the CIBIL problem, you need to follow these steps:
- You can delete your CIBIL history by clearing the outstanding balance
- Once you repay the balance, the lender will provide you with a No-Objection Certificate (NOC)
- They will update TransUnion CIBIL about loan clearance
