CIBIL- Credit Information Bureau (India) Limited is the very first India’s Credit Information Company, this was founded in the year 2000 August. This is the central document for lenders to access the credit worthiness of the borrower and to determine whether to give any credit services to the borrower or not.  It basically will help them evaluate how risky a borrower is prone to be. This CIBIL report will deliver all information with regard to credit cards or any loans outstanding for the borrower. If the outstanding debts are more than the 40% of the income of the borrower, loan will not be provided by the banks or NBFCs.

Common Mistakes in CIBIL Report

Some of the common mistakes in the credit reports are:

  1. Incorrect remarks in CIBIL report by lender
  2. Mistake in name, gender, date of birth or address while reporting by CIBIL
  3. Mistakes during generating CIBIL reports
  4. Fraudulent activities using the documents of another person and hence causing wrong entries

Fix Inaccurate Information or Errors Reported:

It is quite common that some people will go through a phase in life where in the financial instability will affect the CIBIL scoring. The reason for this impact is if you default any payment or if there was a delay in making any outstanding payments or EMI with regard to credit cards, loans or other types of debts. In order to have a clear CIBIL report, it is important to first identify what are the issues and remarks highlighted in the report. Go through this information carefully to check if there was any error reporting or inaccurate information. In case of any, raise this to the officials to have the corrections done immediately. Until this is fixed, it will be affect all your loan requests.

Goodwill Adjustment:

There are some other cases where in the borrower has sufficient fund to repay the loan amount but might have forgotten to make the payment before due date. In such cases Goodwill adjustments will come to assistance. It means on the basis of the goodwill of the borrower, it is possible to request the default remark to be struck of from the reports. Based on the credit history and past payment records the report can be adjusted. Once the lender sends the revised update to the bureau, CIBIL report will have erased information and thus it will help borrowers to make use of CIBIL records for any future transactions.

Auto-Debit towards Payment:

Some banks on the other hand will not be willing to write off the delayed payments or defaults at the basis of goodwill, in this case they might request the borrower to enable Auto-debit towards payment with their bank account. This basically means ECS- Electronic Clearing System will be enabled with your bank account that is monthly payment amount will be automatically deducted from your bank balance on the due date. Thus there is no need for the borrower to worry about due date and transferring funds. However, he/she should make sure there is enough fund in the bank account on the due date for the clearance purpose of the ECS.

Reduce Your Debt Burden – Avoid Loan Defaults in the First Place

Apart from the above options, the borrower can negotiate with banks/ lenders to reduce the outstanding monthly EMIs in case if you are unable to meet the EMI expenses with monthly income. And for this if the borrower can pool in some fund for partial payment, reducing monthly payments will be easy and will be helpful in the long term. However, the borrower should make sure; this step is not leading them to further debts of greater interest rates. This will help in picking up the CIBIL scoring gradually and there will be no worry about late payments and defaults. The two main instruments for this are different types of loans and credit cards; make use of these only in case of emergencies.

How to Get Your CIBIL Report Updated

The above can be summarized into four simple steps which are very crucial for anyone who is looking to improve their CIBIL score:

Step 1: Check your CIBIL report.

Step 2: Raise a Dispute Resolution with CIBIL.

Step 3: Contact lenders directly.

Step 4: Close your Past Dues and Outstanding amounts, if any.

Make use of this information to ascertain how to handle different aspects of the CIBIL reporting to have good credit remarks on the financial activities. This can be checked and corrected via online through their online dispute resolution portal. Once these steps are followed, it will be easy to pick up the CIBIL score.

How to Remove Late Payments from Your CIBIL Report?

Late payments can affect your CIBIl Score a lot and can lead to a lower CIBIL score which can affect your future creditworthiness. This happens because all the banks and NBFCS send the repayment history of their borrowers to the credit unions like CIBIL, Equifax, and Experian.

So, if you want a good CIBIL score it is very important to remove the late payments from your CIBIL report.

Your late payments will definitely be of past and it is possible that till now you have gained stable finances. So, in order to improve your credit score, you can go with a small loan. Take a personal loan of a minimum amount. When you go for a new loan, your history will be created again and when you will be timely with its payment it will create a good CIBIL score for you. Go for a pre-closer option and pre-close the loan when you want.

As a result, your score will improve in a short time without much effort.

 

(Updated 01-08-2018)