written by | March 30, 2022

What is the Significance of DPD on Your Credit Report?

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In these times of tremendous market volatility and financial instability, it is difficult to find a dependable source of finance. It is possible to get immediate financing in various ways, but not all are as simple and affordable as bank loans.

However, most financial institutions are apprehensive about making unsecured loans at present. As a result of a few irresponsible actions in the past, they are on high alert. To avoid this, they've made it a point to thoroughly investigate a debtor's financial situation before deciding whether to lend money to them. Lenders often look at credit quality as the first item on their checklist throughout this process.

Making on-time payments on your loan EMIs and credit card bills can help you improve your credit score. It is more probable that creditors will provide a loan or a credit card to a person who has an unblemished credit record than someone who has a history of bounced checks or excessive usage of credit cards.

Your CIBIL report contains information on credit accounting entries, late payments, current inquiries, and other items. If you have a payment history of more than 30 days past due, lenders will consider this when determining whether or not to accept or refuse your credit application.

According to the CIBIL report, an account's DPD in banking indicates how many days the payments on that account have been late. Continue reading to discover more about this subject.

Did you know? 

DPD is a critical component of your credit report that impacts your credit score.

Why is DPD Referred to as ‘Days Past Due’ in the First Place?

The ‘Days Past Due (DPD full form) column shows how many days have passed since you last made a payment on an instalment or line of credit. If you have previously made on-time payments on your invoices, your DPD will be zero. If you haven't made a payment in 30 days, you'll see the number ‘30’ on your report for the month preceding.

There may be instances in DPD in banking sections when the letters ‘xxx’ in CIBIL is used. It indicates that the lender has not provided the bureau with information about the borrower's payment history. Regardless of whether you find it on your credit report, you don't have to be concerned about harming your credit rating or your chances of receiving a loan or a credit card.

To further understand the term 'DPD,' we may look at the example of a loan that started making payments in March 2016, for example. Borrowers who miss three consecutive payments beginning in April 2016 will have their defaulted payment default (DPD) from DPD loan recorded on their credit reports in the manner specified below:

DAYS PAST DUE (DPD)

90 days

60 days

30 days

NIL

NIL

MONTH PER YEAR

July - 16

June - 16

May - 16

April - 16

March - 16

What Is DPD in Banking, and What Is Its Significance?

It indicates your previous adherence to your EMI payment plan straightforwardly. You may see your payment history for the past 36 months by clicking below. If you're looking for a line of credit, lenders will check into your payment history to determine your eligibility. If your DPD has been '0' over the previous three years, it implies that you have paid all of your bills on time and are thus less of a risk to the lending institution.

If you skip a few payments on a credit card bill, your credit score and trustworthiness may be badly harmed; yet, some lenders may still approve your credit application if you do so more than once. If you have a history of missing payments or failing to pay your debts on time for an extended time, creditors may refuse to accept your loan and credit card applications.

Also Read: Importance of Credit Rating in India

Presence of the Most Current DPD Information in Credit Report

As soon as a lender transmits your credit information to a credit reporting agency, the agency collects and analyses the information in your credit report, increasing your credit score. Even if your lender sends you frequent updates on your credit score, you may not notice a change in your score monthly.

As a consequence of missing 30 deadlines in a row, your credit report will reflect "30" as your default payment date. Your DPD may be upgraded to "60" if you fail to make payments and your creditors inform the credit bureaus again the following month.

Financial experts suggest that you never miss a payment for more than three months at a time to prevent hurting your credit score and credibility with creditors.

DPD Report with CIBIL Issues

As long as you've made all of your payments on time and your DPD shows anything other than ‘0’ on your credit report, you can contact the credit bureau to report the inaccuracy in your DPD.

CIBIL will mark your credit card account as ‘under dispute’ if it receives a request for verification from the applicable lender on your behalf. When the lender provides the credit reporting agency with accurate information, the credit report is updated, and the ‘under dispute’ classification is removed from the record.

The company will also give you an enhanced credit report that will contain your most current credit rating from CIBIL.

Reference of DPD in Your CIBIL Report

In the ‘Pay Timeline’ section of your CIBIL report, you will see a reference to DPD for every one of your credit product accounts. You may see your DPD for each of your current financing alternatives, such as your BOB line of credit, your AXIS Bank home loan, and your BOI bank loan, over the preceding three years by clicking on the appropriate link.

A List of Other DPD Values -

The Reserve Bank of India has established asset category regulations that allow some issuers to disclose DPD values in several ways. Under specific conditions, the DPD's STD, SUB, DBT, and LSS values appear. Taking a deeper look at each of these variables, we can see that

  • STD - Whenever you read the phrase ‘STD’, it indicates that the payment was made within 90 days, referred to as the Standard Payment timeframe.
  • SUB - It shows that expenses have been reimbursed after 90 days, but the quality of the reimbursements is poor, as indicated by the prefix SUB. As per SUB in CIBIL, financial organisations consider these borrowers high-risk assets. Thus they do not lend to them.
  • DBT - If an overdue account has been unpaid for more than a year, the account is branded as DBT. On the other hand, the borrower has a reasonable chance of meeting their repayment commitments. Because of the significant risk associated with these borrowers, most banks prefer not to lend to them and, as a result, reject their loan paperwork.
  • LSS - A LSS is shown in DPD reports when there is no prospect of payment for a particular customer account. The bank has declared the amount on this account to be uncollectible, and the account has been closed. The lending institution nearly often turns down loan applications from people who have LSS in the DPD.

Also Read: How do you repair your Credit Score?

The Necessity to Change the Values of DPD in Finance

Lenders have been known to reject loan applications based on information included in the DPD in the CIBIL section, although the applicant's credit report was otherwise reasonably clean in such cases. For the time being, however, the DPD information included in a person's CIBIL report cannot be modified by that individual.

In some instances, statuses such as ‘Handled’ or ‘Documented Out’ may be resolved in a single operation. However, it will be some months before the DPD portion of the system can be called stable. Even if you had bad DPD a year ago, it would be completely gone in two years.

Conclusion

Although you may not plan to apply for a private loan soon, it is good to watch your credit report. Maintaining good creditworthiness is vital for having good credit when you need it. This will allow you to identify any inconsistencies in your credit history and rectify them before you want the money you require. Additionally, it is vital to make your monthly payments on time and maintain a good credit rating to maintain long-term financial well-being and security.

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FAQs

Q: Which DPD loan value is regarded as a negative value?

Ans:

All DPD loan values other than ‘000’ and ‘xxx’ in CIBIL  are deemed negative for this calculation. After ninety days of being overdue, accounts are considered non-performing assets in the eyes of banks. Furthermore, statuses like "Written Off" and "Settled" are harmful.

Q: Does your credit report include the most recent DPD information?

Ans:

A lender's information about your credit behaviour is sent to CIBIL, and CIBIL's DPD value is updated every time. Additionally, it provides a foundation for the credit bureau's analysis of your credit report.The DPD in the banking code may not change each month, even if your bank or financial institution reports your credit activity to the credit bureau regularly. EMIs and debt payments must be paid within three months of due dates. Your credit and creditworthiness might deteriorate as a consequence of this.

Q: Can the DPD significance be changed?

Ans:

In many cases, lenders turn down loan applications despite a borrower's good credit history. ‘xxx’ in CIBIL  or '000' are the only possible values for the DPD section. Next month, you will be unable to change the DPD data in your CIBIL report.

Q: Once the DPD is stabilised, how long does it usually take?

Ans:

It may take up to two years or more to establish a stable DPD if your DPD is insufficient.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.