Written off on your CIBIL report? Here's how to fix It
Planning to apply for a credit card or loan? Then make sure a "written off" status is not on your CIBIL report, as it will make it difficult for you to secure a loan or credit in the future.
What is a CIBIL report?
A CIBIL report is an overall credit report that includes a person's credit summary, personal information, contact and employment information, as well as loan account details. The CIBIL score is mainly determined after evaluating the credit history found in the CIBIL report.
This report is also known as a credit information report, or CIR. Simply put, a CIBIL score is a three-digit numeric representation of a customer's credit history, ranging from 300 to 900. The closer your score is to 900, the higher are the chances of your loan application getting approved.
Factors affecting credit history
Payment history
A customer's payment history is one of the factors that lenders consider when determining creditworthiness. It shows how consistently they have made payments on time and in full. Late payments and missed payments can negatively impact your CIBIL Score.
Credit utilisation
Credit utilization refers to the amount of available credit you're using. Higher credit utilization suggests you may be over-extended, making you appear to be at credit risk to the lenders. Aim to keep your credit utilization ratio well within your available credit limit.
Tenure of credit
The length of time you've held credit accounts (i.e. loan account, credit card, etc.). It shows lenders that you have a track record of managing credit responsibly over time. A longer credit history is typically seen as a sign of stability and reliability.
Credit enquiries
When you apply for new credit, lenders will often check your credit report to assess and onboard customers with a proven track record of making timely payments. Applying for credit too frequently in a short period of time can therefore negatively impact your CIBIL Score.
What does "written off" in a CIBIL report mean?
If your loan has a "written off" status in your CIBIL report, it generally means that the lender thinks that such loan is completely unrecoverable. Your creditworthiness suffers terribly as potential lenders would consider you to be a hazardous borrower. Because it means you haven't been reliable regarding paying back obligations, it can hurt your chances to obtain credit in the long run. So, when a customer is unable to make payments against the outstanding loan or credit card amount, the bank or credit card company is required to "write off" the amount. The lender then proceeds to report this on your CIBIL Report as "Written off". This is a detrimental status for the approval of your loan or credit card applications as the lender may not want to provide a loan or credit card to someone who has not paid dues on past loans or credit cards, as "written off" status in a CIBIL report generally means that the lender thinks that such loan is completely unrecoverable.
How to resolve the 'Written Off' status from a CIBIL report?
Read your CIBIL report
Request a copy of your CIBIL report. You can obtain it from the CIBIL website. Then, review this report carefully and check if the 'Written Off' status is properly reflected.
Settle outstanding dues
If you have any outstanding dues with the banks or credit card firm, settle them in full or settle a mutually agreed-upon amount. Once the payment is completed, ask them to update the same on your CIBIL report.
Request for a no-due certificate
Once you have cleared all your outstanding dues, you can request your banks or credit card firm for a No Due Certificate, which acts as proof that you do not have any outstanding debt.
Update your CIBIL report
Request the bank to update this information in CIBIL when you get the no dues certificate. This will ensure that the settlement reflects on your credit report as soon as possible.
