21-Mar-2018 written by : FSI-Team
A credit report plays an important role when you try applying for a loan at urgent situations. Not only when applying for a loan but whenever you are trying to make any lending transaction with the bank, the credit score is always verified.
There are many questions which pop up in our mind when the term credit report is introduced to us. What is a credit report? How is it important for us? Does everyone have a report? Is it that important to maintain a good cibil score? Etc. The answer to all these questions is simple; a credit score is the determining factor when you apply for a loan or a financial product like a credit card.
Many of us default our payments. Some do it because they have no choice and some do it purposely. When you default a payment, an entry is made at the credit bureau of the default transaction which then affects your cibil score. This results to a bad credit score which can result to no loans in the future. Each bad entry can last in your report up to seven to ten years. Many individuals had default on their loans in the past and in the present they are finding it very difficult to get a loan.
The answer to this is a yes! Luckily, it is possible to amend your report without having to wait for years.
Today we will sight 3 ways you can get the default transactions off your credit report,
The very first step you need to take is to check your cibil report. You can get a free cibil report online from a lot of websites these days. Check your report thoroughly for any errors at all, check factors like, account number, credit limit, account status, payment status, etc. If you find any error in the report, you are in luck.
There are studies which state maximum number of credit reports of individuals contains errors. The credit bureau is the one which keeps record of your financial transactions and accumulate into a report. There are high chances that your report may contain error and you can definitely bank on it.
Once the error is detected, you can raise a dispute with the bureau. This procedure will take a lot of time but it is worth a shot as this can delete your wrong entries and enhance your cibil score within no time.
This trick is a bit old school but works in a lot of situations. Imagine you took a personal loan from a bank and made the repayment of the same but the account contained a lot of late payments and defaults and that has damaged your report to a very bad extent. What would you do?
You can write a goodwill letter to the bank stating the loan account number and your existing credit report with an explanation o why there were defaults on the loan account and you have closed the loan account. You will have to request the bank to remove the negative entries from your report, as bank has the power to do so. A lot of times, the bank understand your situation and get your negative marks of the report. This is completely on the sole discretion of the bank authorities.
This solution is ideal when you have an existing line of credit running with the lender. If due to a lot of late payments your cibil score has taken a hit, you can negotiate with the lender stating you will pay whatever penalties which are associated with the late payment, but they have to delete the negative remark from the credit report. Again this is on the sole discretion of the lending authorities.
Once your report takes a hit with a default payment, it is really hard to get it out of your report and improve your cibil score. It is better to make all the payments on time so that you do not have to face such situation in life.