It’s Time To Remove Your Name from the CIBIL Defaulters List
Your creditworthiness is not measured by your monthly income or balance in the savings account—it is measured by your CIBIL score. A high CIBIL score makes you very eligible for credit; whereas, your name in the CIBIL defaulters list means that you will simply never get a loan.
CIBIL Defaulters List
CIBIL is an Indian credit intelligence agency which collects financial information of individuals from its participating financial institutions and assigns a score.
The CIBIL score ranges from 300 to 900. The closer you are to 900, the more easily you will get a loan. A score in the vicinity of 300 means your name is in the defaulters list. No bank will lend credit to a person whose name is in this list.
Three reasons why your name is in the CIBIL defaulters list
- Incorrect information, like your name, address, etc., in the list
Human error could have put you in the defaulters list. For instance, you may have recently shifted to a house whose previous owner had defaulted on a loan. Your bank may have automatically linked you to your new address and put a red flag against your name.
- Incorrect reporting
Your bank may have reported your financial data inaccurately. For instance, it may have reported outstanding balance on a loan that you’ve paid.
- A loan default
You didn’t pay a loan that you had taken, and as a result, your name is in the dreaded defaulters list.
How to remove your name from the defaulters list
First, understand why your name is in the defaulters list. Get a copy of your credit report from the CIBIL website and study the information listed.
Depending on the reason behind your blacklisting, take the necessary steps.
Information is incorrectly reported
Use CIBIL’s online redressal mechanism to get any errors in your report corrected. However, before filling up the CIBIL online dispute form, ensure that you’ve correctly identified the errors and have all the relevant proof ready.
Pay the outstanding amount or settle the account
If your name is in the defaulters list because you didn’t pay a loan, you’ve got only one option: pay the amount you owe.
Cut corners, if necessary, but pay the full amount and clear your name from the defaulters list. And once your name has been removed, practice prudent financial behavior to improve your credit score. These include
- Pay bills on time – Even a single late payment can hit your credit score badly. Send a reminder on your phone for each of your EMIs, so that you don’t miss any payment.
- Use your credit card judiciously – Ensure your total credit card usage is less than 40% of the total credit available to you.
- Save for future – Your savings account should have six times your monthly EMI amount. This amount will help you pay your EMIs on time in case you are hit by an unexpected financial crisis.