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Do you have “Repossessed and Settled” status in your CIBIL report? Basically, this is a newly introduced credit facility status in the CIBIL reporting format, implemented by the RBI at the beginning of 2025. However, the important thing is: the “Repossessed and Settles” tag in a loan account negatively impacts CIBIL score, and can even be responsible for loan rejections. If you’re facing the same consequences, then it’s crucial to understand how to deal with the situation—and more importantly, how you can remove repossessed and settled status from CIBIL report. But don’t worry! In today’s article, we’ll cover everything you need to know about this topic. So, let’s begin with a basic understanding of what “Repossessed and Settled” means in a CIBIL report.
What does Repossessed and Settled mean?
As you can see, the term “Repossessed and Settled” combines two separate banking terminologies—‘Repossessed’ and ‘Settled’—each carrying a distinct meaning in the financial industry. For better understanding, let’s break them down and explain individually.
In simple words, repossession refers to the procedure by which a lender seizes the collateral pledged by the borrower due to non-payment of the loan interest. It is typically the final step of the recovery process, followed by the lender, if they fail to recover the debt by doing a personal discussion, or by sending written reminders or legal notices to the borrower.
On the other hand, loan settlement refers to an agreement between the lender and the borrower, where the borrower is unable to repay the full outstanding loan amount due to financial crisis—closes the particular loan by paying a negotiated amount, less than the actual due.
Now, the “repossessed and settled” status appears in a loan account when the lender repossesses an asset and sells it through an auction; but, the sales price of the asset does not cover the entire outstanding debt (including principal amount, interest, penal charges, repossession and sales expenses, etc). Due to this deficit amount, they treat it as a compromise settlement and tag the loan status as Repossessed and Settled in CIBIL report.
For example, you avail a vehicle loan for a tenure of 36 months. In the beginning years, you serve your loan EMIs timely without any default. But later, due to unforeseen circumstances such as job loss or medical emergencies, you fail to repay your loan EMIs for several consecutive months. After 3 months of non-payment, the loan is classified as an NPA (Non-Performing Asset), and your loan account is treated as bad debt.
As per the loan agreement, the lender will first attempt to recover the dues through reminder emails, recovery calls, and legal notices. If you ignore these reminders and fail to clear the outstanding amount, then the lender chooses their final recovery options as per the loan agreement, which means they will seize your vehicle.
The only purpose of repossessing is to realise your pending dues. If you pay your loan outstanding at this stage, the repossessed vehicle will be returned to you. But in the case, if you fail to repay the due, they will recover the debt by reselling the repossessed vehicle. Since the resale value is often lower than the market price, the remaining loss is treated as a settlement, and the loan status is updated as “Repossessed and Settled” in your CIBIL report.
How does Repossessed and Settled impact on CIBIL score?
- The repossessed and settled status has a severe negative impact on the CIBIL score, which can cause a remarkable dip in your CIBIL score.
- Simultaneously, this status also damages your creditworthiness, and represents you as a risky borrower who has a default history in past.
- The negative remark “repossessed and settled” will remain on your CIBIL for lifelong, until you pay off the deficit amount to the lender.
How to remove Repossessed and Settled status from CIBIL Report?
Now, the main point of the content, what procedure you should follow to remove the “Repossessed and Settled” tag from your CIBIL report.
As I mentioned earlier, here the respective lender faces a loss, which is why they reported the loan as “Repossessed and Settled” in your credit report. So, here, you have to pay the remaining outstanding (or the deficit amount) to the respective lender to remove repossessed and settled status from CIBIL Report. So, start by contacting the lender.
- Contact with the respective lender:
You can approach the lender through their online portal, their official email ID or by visiting the nearest loan availing branch. Ask them to provide the exact payable amount to remove Repossessed and Settled status from CIBIL report. If possible, collect the payment details in written format.
- Make the payment and collect the NOC:
After getting the payment details, pay the demanded amount immediately. After making the payment, don’t forget to collect the full and final payment No Dues Certificate. Because all these payment proofs will be required when you raise online dispute in CIBIL
- Raise an online dispute in CIBIL:
As the loan account was already closed under settlement, that’s why you have to put some extra effort to update the loan status in your CIBIL report. On the TransUnion official website, there are several methods available through which you can highlight your concern with them. The two most effective methods are:
i. Raise a dispute through your CIBIL Portal:
If you are a first-time user, register yourself in CIBIL along with your KYC details and create your CIBIL account. Then log into your CIBIL Portal and navigate to the “Raise a Dispute” section. Select the particular loan account, and change the account status from “Repossessed and Settled” to “Clear Existing Status”. Then, finally submit the dispute and save the dispute Id for future reference.
ii. Write a complaint letter to CIBIL
In this method, visit the TransUnion CIBIL contact us page, and fill out the dispute form with your KYC details. Here, you will get the option to describe your query in 3000 characters. So, briefly write your concern and attach the payment proof in the attachment section. After re-verifying all the details, submit the dispute form. After successful submission, you will get a Service Request Number from CIBIL. Save it for future reference.
- Send an email to the CIBIL higher authorities:
When you raise an online dispute in CIBIL, they usually take an average of 30 days to resolve your query. But if they fail to resolve your concern within 30 days or you are not satisfied with their resolution, then in that case, you can escalate your complaint to CIBIL grievance officers. Send an email to their escalation and nodal officers along with the prior complaint Ids.
CIBIL Escalation desk: escalationdesk@transunion.com
CIBIL Nodal: nodalofficer@transunion.com
- Send a request to the lender for CIBIL updation:
As per the Credit Information Company Regulation (Act), 2005, TransUnion CIBIL don’t have any authority to modify any information in your CIBIL report. That’s why when you raise a dispute in CIBIL, they forward the disputed details to the respective lender for further verification. So, additionally, send a separate complaint to the lender for faster resolution. After the investigation, they will remove repossessed and settled status from CIBIL report.
- Register a grievance through the RBI Portal:
If CIBIL and the lender fail to resolve your complaint even after 30 days, then you can file a grievance against the regulated entities at the RBI Ombudsman Portal: https://cms.rbi.org.in/cms/indexpage.html#eng, or you can send an email to their email id:
crpc@rbi.org.in. Here, mention all the case-history in detail and attach all the previous communications with CIBIL and the lender.
