written by | March 21, 2022

Ways to Remove Your Name From CIBIL’s Defaulter List

A credit score is one of the few considerations when determining your financial eligibility, and it will be one of the most important. It is an important consideration when a creditor decides whether or not to approve your repayment plan. ‘CIBIL defaulter’ is a term that you should avoid at all costs due to the importance of your credit score in today's society.

In the case of credit institutions, such as a bank, several factors influence whether or not a loan is granted. Financial institutions will check your credit history and score to see any discrepancies between your credit history and your identification if you apply for a loan. A loan or credit card application will be almost always denied if you have a poor credit rating. Unfortunately, we are unaware of any ‘Defaulters List’ maintained by the CIBIL (Credit Information Bureau India).

Did you know?

Defaulters are categorised into wilful and non-wilful. It has been done to differentiate between genuinely in debt people and those who willfully forgo their repayments.

Methods to Remove Name off the CIBIL Defaulter List

If you are searching for ways to remove your name from CIBIL’s defaulter list, you have come to the right place! To get your name off the list, you need to obtain a copy of your credit information report.

For this reason, if you just want to avoid being labelled as ‘Defaulter’, you must keep your credit score as high as possible. 

Here are some of the key things you need to consider while attempting to get your name off the defaulter list:

Check for Human Error and Make Sure Your Information Is Accurate

In some cases, credit card details and ownership details are misreported. If you suspect that someone has been using your identity to delay repayment, you should take immediate steps to rectify it.

Obtain Your Credit Information Report and Identify the Defaulting Provider

If you can identify the defaulter provider, you can faster remove your name from the list. Then, write a letter of acknowledgement stating that your name has been incorrectly added to CIBIL. You can send this letter to the bank, NBFC, or CIBIL.

Also Read: How do you repair your Credit Score?

Study Your Credit Report

Take the time to examine your credit report thoroughly; this will assist you in understanding any differences that may exist and ensure that the information included in the notification is accurate. 

You should thoroughly analyse your credit report before attempting to have your name removed from the CIBIL defaulter list. You should double-check your work for errors and ensure that your information is correct. 

In certain situations, human errors will result in you having an incorrect credit card or ownership information on your credit report. It's also possible that you've been the victim of identity theft, which might result in repayments being delayed.

Improve Your Credit Score

First, you must request a copy of your credit information report from the credit reporting agency. You should go through the message again to ensure there are no mistakes. If you discover any inaccuracies, you should contact your financier as soon as possible and request that they be corrected.

Second, you should discontinue the practice of establishing many credit cards. Multiple credit cards indicate that you have a strong need for credit, which increases your chances of defaulting on your debts by a significant margin.

You must first get a copy of your credit information report to remove your name from the defaulter list. You will be able to determine whether or not you have defaulted on any loans or advances as a result of this. It will assist you in taking the necessary measures to make apologies and get your name removed from the defaulter list. You may then submit a loan or credit card application.

Clear Off Your Outstanding Dues

The most effective strategy to boost your credit rating is to pay off all of your outstanding debts on schedule. 

  • To pay off your debts, you may speak with your creditor and work out a payment plan that works for both of you. 
  • Once your debts have been paid off, wait three months before checking your credit report to see whether it has been updated with the new information.
  • Before seeking to be removed from the Defaulter List, you should ensure that your debts are current. This procedure takes around three months and requires ‘no dues certificates’ from each bank. 
  • Additionally, regardless of whether you are in default or not, you must make all of your loan instalments on schedule.

Do Not Exceed Your Credit Limit

Although there is no direct method to get your name removed from the defaulter's list, there are steps you may take to enhance your credit rating. 

Make sure you never go over your credit limit again and that you pay your loan instalments on time every month. 

  • The first step is to get in touch with your lender and explain what has happened. You should do this to determine whether you are already on this list. 
  • After explaining your circumstances to the bank, your name will be removed from the CIBIL defaulters' list.
  • If your name has been placed on the defaulter list, you should refrain from applying for any more credit shortly. 
  • While it is feasible to get a loan, you should avoid borrowing more than 30% of your available credit limit. It is since applying for more than one loan may indicate to the lender that you need more credit. 
  • Furthermore, requesting an excessive number of short-term loans would demonstrate to your creditors that you are insatiably eager for credit. The ability to keep your credit utilisation under 30% of your credit limit increases your chances of receiving approval for a new loan.

Never Apply for Several Loans and Credit Cards at the Same Time

If your name appears on a defaulter list, you will be unable to get a loan or credit card. 

  • The only method to get your name removed from the defaulter list is to take the initiative and remove it yourself, and it is a simple process.
  • It is necessary to acquire a copy of your credit report, and it will assist you in determining whether or not you have been a defaulter in your payments.
  • You'll be able to make corrections when you've seen your record.
  • If this is the case, you should email the editor apologising for your error. If you do not comply with the agreement terms, the NBFC or bank will remove your name from the list.

Also Read: What is the Impact Of "Settled" Status On Your CIBIL Score?

What May Be Needed to Avoid Being Placed on the Defaulter’s Roster?

If you want to keep your name off the CIBIL's loan defaulter list, you may take the following steps:

  • Knowing the Control Number is essential when dealing with CIBIL defaulters (CN). Any financial institution that requests a copy of your CN will also get a copy of CIBIL's score report. Using a credit report identifying number (CN), you may access and monitor your credit report in a convenient and straightforward manner.
  • Before attempting to raise your credit score or having your name removed from the list, you must first get a copy of your credit report from the credit reporting agency (CIR). You may use this approach to determine whether or not you have defaulted on any loans or credit cards. 
  • Once you've taken the necessary actions to rectify the position you're in, your name will be removed from the defaulters' list, which will take a few days.
  • Reduce the number of credit cards in your wallet as soon as possible. It is the most critical step you can take to improve your credit rating. Owning many credit cards increases your chances of filing for bankruptcy.
  • To guarantee that the outstanding loan amount and Days Past Due (DPDs) on the borrower's CIBIL report accurately represent the real story of the borrower, you must double-check that the loan amount and Days Past Due (DPDs) are correct.
  • Last but not least, make sure that all of your credit card payments are received on time each month. It is critical that you put your past behaviour behind you and immediately begin making on-time payments of your equal monthly instalments to avoid further consequences (EMIs). Even if your credit isn't ideal right now, following the steps outlined here may assist you in improving it.

Conclusion

Contact CIBIL once you get a duplicate of your report to start proceedings. The firm will request this information using your Control Number (a nine-digit number used to track your credit report). You may ask to have your name removed from the report after getting a copy of it. Good news: It's not that difficult to remove your name from the defaulter list.
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FAQs

Q: Is it true that NPA impacts the CIBIL score?

Ans:

Minor defaults are payment delays or missing payments of fewer than 90 days. As a consequence, your CIBIL score is temporarily reduced. NPAs are clients who have not paid for longer than ninety days (non-performing assets).

Q: Is it possible for a CIBIL loan defaulter to get a house loan?

Ans:

For obtaining a mortgage despite a CIBIL delinquency, we suggest the first action you should enhance your credit score. Pay off any outstanding loan EMIs or credit card debt. So you can acquire a mortgage.

Q: In India, how long does CIBIL keep track of people who default on their loans?

Ans:

The CIBIL Credit Information Report includes how long the CIBIL database keeps track of defaulters. CIBIL holds this information for seven years, and the CIR has no records older than seven years.

Q: How can I get my CIBIL account in order?

Ans:

You must pay off your debt and get a NOC (No Objection Certificate) from the lender to remove the ‘Settled’ status from your CIBIL record. Contact the Financial Ombudsman Service of CIBIL.

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