03-June-2016 written by : FSI-Team
When one approaches a bank or any other lender for a loan the first thing that the prospective lender will do is get the Credit Information Report (CIR) of the person. Based on the CIR the bank will decide whether accept the loan application or not. The CIR has the CIBIL score which is a three digit number and it also has detailed information about all loans, personal details of the borrower, employment details etc. Generally a score above 750 is considered good enough to get a loan sanctioned but again it is on the discretion of the lender. CIBIL issues no directives for sanctioning or not sanctioning a loan to a particular person; it only collects the information about all borrowings of a person and presents it in a concise manner in the form of a Credit Report.
In case you are wondering how to check CIBIL defaulter list and see if you are there on it or not please remember there is no such list. Contrary to the general belief CIBIL neither maintains a defaulter’s list nor there is any CIBIL blacklist! All delays and defaults by a person are mentioned in his/her CIR. Depending on how much the payment has been delayed the asset is classified SUB, NPA, SMA etc. This means that CIBIL or any other rating agency does not classify anybody as a defaulter or makes a blacklist of people who have not paid. Rating agencies just collect data that relates to any delays or defaults and depending on the nature of it classifies it under various categories. How a lender interprets is the lender’s choice.
Since there is no blacklist, nothing much can be done to remove one from that list!! However if your loan is being rejected due to a poor CIBIL score then you might have to do something to rectify the situation. Though there are loans for low credit score but these are available at very high interest and are avoidable.
Another thing to keep in mind is that CIBIL cannot remove or change any information on its own; it can do so only after the requisite information is received from the respective lenders. As stated earlier the loan is classified under different categories depending on how old the delay or default is. The impact of any default is based on the fact that for how long has it been pending and also to an extent that how much is the pending loan size. Depending on the default status the borrower can work out a payment plan with the borrower to clear the dues.
Once the dues are cleared the default will removed from the CIR, this takes almost 30 to 45 days to be updated. Even after the default status is updated the impact of it stays on the credit score. After waiting for the required number of days after paying the dues, one can get the complete CIR or access free credit score online to see if the required changes have been made. If you however find that the record has not been updated despite paying the dues, then you need to file a complaint with the bank. If that also does not work then they can write to the banking ombudsman.
On some rare occasions a default may be shown in your report erroneously. Do not panic, it is something which can be sorted out. You can raise a query with CIBIL which will write to the concerned agency or lender and get it resolved. This is the precise reason for which one must keep accessing their CIBIL report from time to time to remove the possibilities of any such errors that might occur.
The only way to remove defaults that may occur in your report is to pay the dues so that lender informs CIBIL accordingly and it is omitted in the next CIR.