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Recovering From DPD’s On Your CIBIL Report

What's The Highest Possible CIBIL Score?
Jay Kaul
Written by Jay Kaul

The Effects Of Credit Mistakes Can Linger Longer Than Expected

We have an email today from reader Asif who is having some trouble getting a loan approval after some credit trouble back in 2006. Let’s take a look and see if we can provide a little bit of insight.

Dear CreditSmart, 

My credit score is 769 , But in 2006 , my credit card is in under dpd mark , but in 2013 status updated closed .Now I am in need for personnel loan , but due to high inquiries & DPDs , My file gets rejected.What is the proper solution.Now I hv received credit card, but no loan.

Asif

Our Reply,

 

twitter-sizeHello Asif! Rejection is frustrating. Even though you have moved past your credit mistakes and become more responsible with your credit, it seems the banks tend to hold a grudge. You really only have two options here. The first option is to wait, which I know probably is not ideal for you, but it would ultimately prove to be the better solution. If the status was updated as closed in 2013, that is fairly recent. You did not indicate whether it was closed and paid off, or simply charged off by the issuer. That could make a difference on the long term impact.

Your credit score is solid at 769, and the fact you have a credit card now is excellent. It would be in your best interest to use the card frequently and maintain on time payments for at least another year before applying for a loan. In the meantime, do not apply for any more credit. You mentioned you have high inquiries, and that is a big red flag to lenders as they see you as credit hungry – and thus high risk. If you allow time for the inquries to age out of your report and keep your score high through making on time payments, you should be in good shape. Additionally, the amount of money you want in a loan matters. If you ask for more than the bank thinks you can pay back based on your income, then a rejection is likely.

Another option…

Your second option would be to find a guarantor for your loan, someone to co-sign and back the amount should you not be able to pay. This, of course, comes with it’s own set of risks – mainly for the guarantor. However if you need money soon, then a trusted friend or family member who’s willing to help you out could be the answer.

About the author

Jay Kaul

Jay Kaul

Jay is a financial and credit expert and freelance contributor to CreditSmart. He's always keeping his eyes open for the latest credit card trends in India and provides a sharp insight on new entries into the market.

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