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A Write-off in CIBIL is when a loan or credit card dues were declared as uncollectible, by the lender even after numerous attempts. This is reported to CIBIL (Credit Information Bureau India Limited) and mentioned in your other credit reports also. It becomes an indication to future lenders that you have defaulted on a financial responsibility, hence making it more difficult to obtain loans or credit cards.
How to Write-off Impacts CIBIL:
A write-off in CIBIL negatively affects your credit report. It shows an adverse repayment behaviour and lowers your credibility in front of financial institutions.
Even if the lender declared everything a write-off, you are still legally obliged to pay. All records regarding write-off would remain on your report for years, blocking any sort of financial opportunity.
Steps to Remove Write-off in CIBIL:
Here are some steps that may help you clear write-off in CIBIL report:
1. Obtain your CIBIL report:
Download your latest credit report from CIBIL website or any authorized outlet. Find the account marked as “written off.”
2. Get in touch with the lender:
Call the bank or financial institution that reported the account as written off. Ask for a clear breakdown of the outstanding amount and say you want to return the dues.
3. Pay entire debt:
Depending on your financial situation, give them a chance to negotiate for settlements or make full payment. Usually, in a settlement, you pay a mutually agreed amount and the bank marks it as “settled” rather than “written off.” “Settled”, however, is still a negative comment which is less damaging compared to “written off”.
4. Get a No Dues Certificate:
After payment, ask your lender for a No Dues Certificate or Loan Closure Letter, very important to clear Write-off in CIBIL.
5. Raise a dispute with CIBIL:
Visit the CIBIL website and raise a dispute to clear Write-off in CIBIL. Attach the No Dues Certificate or Loan Closure Letter as evidence. CIBIL will verify the documents with the lender and update your report as per their findings.
6. Chase for follow-up:
It can take almost 30-45 days for the update to get through into your report. Follow up with both the lender and CIBIL regularly until the change is made.
7. Watch your credit score:
After an update, your credit score may slightly increase with time. Therefore, keep monitoring your credit report and watch your credit behaviour.
Tips to Avoid Future Write-off in CIBIL
Follow the given tips to avoid write-off in the future:
– Make sure to pay your EMIs and credit card bills on time.
– Avoid taking loans which are more than your repayment capacity.
– Maintain a decent credit mix by balancing secured and unsecured loans.
– Maintain credit utilization below 30% of your total limit.
– Check your credit report regularly and ensure it is free from errors and discrepancies.
Conclusion
Clearing a write-off in CIBIL is not impossible but requires dedication and financial discipline, also the process is time taking. If you repay your dues to the lenders and demand a change of status from CIBIL, you may really start up with new activities to repair the credit profile from scratch.
An unblemished CIBIL report will give preference to customers in selecting financial products with better offers and lower interest rates. Remember your credit history is a makeup of your financial behaviour. So, maintain it with care.
