While borrowing any kind of a loan every lender verify few things about you and Credit score is rated as the highest among all. Credit score is a key parameter that enrage you to avail a loan on your terms and conditions, lower interest rates and many more benefits. A good credit score always help you to have a higher hand while discussing and negotiating on charges charged by the Bank/NBFC.
Many of us do not have any idea about this term and many of us are very well aware of it and always take necessary steps to maintain it. But when you hear “CIBIL Defaulter’s List”, what is the first question that comes to your mind?
Most of the home loan borrowers think that the Credit Information Bureau of India Limited (CIBIL) maintains the list of defaulters. But, the reality is that the CIBIL is a credit information company which only maintains the credit history of every individual as given by the Banks/NBFC’s and other financial institutions on a periodic basis and does not maintain a defaulters list.
The CIBIL is not responsible for the decision to grant a loan or not. It is completely dependent on the credit policy of the lending institutions.
So, what to do if your name is in the list of defaulters? How can you get it removed and stand as a good creditor?
Let’s read ahead to know how you can remove your name from the defaulter’s list.
If you have plans to take a home loan make sure that your CIBIL score is good and your name never comes in the defaulter’s list due to any reason. In case if it’s there, then before you try to get your name off the list, you need to understand why your name appeared on the list.
The following reasons mentioned below could explain you in a better way why your name is on the defaulter’s list.
• Check the kind of error you have in your CIBIL report. This could be a human error due to which your name is on the defaulter’s list. The best way is to check and to ensure that all details are correctly mentioned in the report. For example, if you need to check that your PAN card details, name, address, date of birth etc. are correct in your CIBIL report.
• There could also be an error due to the wrong reporting of details by your lender. Banks/ NBFC’s and other financial institutions have to submit a large amount of data about their existing clients and their financial reports to the agency. So, the probability of such an error and the chances of identity thefts are quite very high. This can lead to an error such as reporting of late repayment, despite making all payments on time.
There could also be a possibility of settling of a credit or delay/ no payments or any other reason due to which your name is in the defaulter’s list.
• The initial information that you need to know regarding the CIBIL defaulter’s list is the Control Number (CN). Every time a Bank/ NBFC or a financial institution asks for your CIBIL report, a CN is generated. A Control Number (CN) is a nine-digit number that makes your credit report easily available and traceable to the lender.
• Due to any reason if your credit score is low and if you want to improve your credit score or remove your name from the defaulter’s list, the next step you need to take is to find out your credit information report (CIR). This CIR enables you to check any advance/ credit` you might have defaulted on. From there, you can take steps to rectify the situation so that you can remove your name from the defaulter’s list.
• One most important thing that you can do immediately is to avoid having multiple credit cards. Usage of too many credit cards will indirectly hint the lender that you are highly in the need of credit, and that in turn increases the chances of defaults.
• One should avoid applying for too many credit cards and unsecured loans unnecessarily. Try to avoid pre-approval of loans too. In case, if you have too many revolving credits already running and do not have any plans to take a home loan in near future. Too many unmanaged unsecured loans create a greater the number of enquiries in your CIBIL report which will take you more steps towards the lower bracket of CIBIL score.
• The borrower should also ensure whether the outstanding loan amount and Days Past Dues (DPDs) which are reflecting in your CIBIL report reflect the true story or not.
• Last but not the least, try to make all the related payments of your credit out-standings punctually. Forget the mistakes you have done in the past and start making your equated monthly installments (EMIs) payments on time. The above steps will definitely help to improve your credit score even if it is not in a very good shape currently.