CIBIL Written Off Meaning, Status and How to Change It

The CIBIL score is a key measure of an individual’s creditworthiness and plays a vital role in determining loan approval. A clean CIBIL report – free of defaults, reflecting low credit utilisation (ideally below 30% of the available limit), minimal credit enquiries, and a high credit score – significantly improves the chances of securing loans at lower interest rates.

However, a "written off" status on your CIBIL report can severely impact your credit score and loan eligibility. In this article, we’ll explore the meaning of a CIBIL "written off" status, its implications, and how to remove “written off” status from the CIBIL report.

What Is the CIBIL “Written Off” Meaning in CIBIL Reports?

A "written off" status in CIBIL refers to a loan or credit account that has been categorized as uncollectible by the lender. This typically occurs when a borrower fails to repay dues for an extended period, usually six months or more. The lender then reports this status to credit bureaus, which negatively impacts the borrower’s credit score.

It’s important to note that a CIBIL write-off status does not absolve the borrower of repayment obligations. Instead, it is an accounting practice used by lenders to manage bad debts on their financial statements.

How Can You Remove a Written-off Status From Your CIBIL Report?

If your CIBIL report shows a write-off status, it’s essential to take corrective measures. Here are the steps to remove the written-off loan from CIBIL:

1. Request your CIBIL Report and Validate: 

Obtain a copy of your CIBIL report from the official CIBIL website. Review it to verify whether the written-off status is accurate.

2. Contact the Lender: 

Reach out to the lender who reported the status. If the CIBIL written-off status is incorrect, provide evidence to support your claim and request correction. If the status is accurate, negotiate a repayment plan or settlement amount.

3. Settle the Dues: 

Settle the dues either in full or at an agreed-upon settlement amount. Once the payment is made, request the lender to update your CIBIL report to reflect the payment.

4. Obtain a No-Dues Certificate: 

Once the dues are cleared, request a no-dues certificate from the lender to ensure there are no discrepancies in your records.

5. Raise a Dispute with CIBIL: 

If the write-off status remains in your report despite repayment, raise a dispute with CIBIL. Provide the necessary documentation, including the no-dues certificate, to get the status updated.

6. Monitor Your CIBIL Report: 

Regularly check your credit report to ensure that the status has been updated correctly and that there are no errors.

How Can You Avoid a CIBIL Status of “Written Off”?

Now that you understand what a CIBIL write-off means and how to remove it, here are a few tips on how to altogether avoid getting this status:

• Carefully evaluate your ability to repay the loan before committing to it. This will help you avoid financial strain later.
• Explore different loan options and choose one that aligns with your financial situation and goals.
• Before signing any loan agreement, read the terms and conditions carefully to fully understand your repayment obligations.
• Create a budget to manage your expenses and ensure that you can meet your loan repayment deadlines without fail.
• If you anticipate any difficulty in repaying the loan, contact your lender early to discuss possible solutions, such as restructuring or deferring payments.

Can ‘Written-off' Status Affect Loan Approvals?

Yes, the negative impact of written-off loans on CIBIL score is significant and can make loan approvals challenging. Financial institutions consider a written-off status a major warning sign, suggesting a higher risk of default.

How Can You Rebuild Your Credit Score?

Here’s how you can rebuild your credit score after receiving a CIBIL write-off status:

• Always pay your dues by the due date to avoid further damage to your credit.
• Avoid over-borrowing and aim to keep your credit utilisation ratio below 30%. This shows lenders that you are managing your credit responsibly.
• Regularly review your CIBIL report to identify and rectify discrepancies that may damage your score further promptly.
• Build an emergency fund to cover unforeseen expenses and avoid missed payments. 

Conclusion

While a CIBIL written-off status can be a setback, it is not irreversible. By proactively clearing dues, negotiating with lenders, and improving your credit behaviour, you can rebuild your credit score over time.

At SMFG India Credit, you need a CIBIL score of at least 750 and a strong credit history to apply for personal loans. Check your eligibility and apply for loans of up to INR 30 lakhs* at attractive interest rates and flexible repayment tenures.