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Here's How To Avoid Getting Listed As A CIBIL Defaulter?

Published on Mar 10, 2023Updated on Nov 30, 2023

Here's How To Avoid Getting Listed As A CIBIL Defaulter?

In India, CIBIL (Credit Information Bureau (India) Limited) is a credit information company that maintains records of an individual's credit history and provides credit information to banks and financial institutions to help them make informed lending decisions. If you miss paying your loan EMIs or credit card bills, it can negatively impact your credit score and get you listed as a CIBIL defaulter. 

In this blog, we'll look at what it means to be listed as a CIBIL defaulter, the ramifications of this classification, and how to remove a name from the CIBIL defaulter's list. So, if you want to raise your credit score and keep it steady, keep reading!

CIBIL Defaulter’s List 

A "credit defaulter's list" is a list of people or businesses who have failed to repay their loans or debts on time. Credit bureaus often gather this information; which financial institutions like banks and NBFCs can use to assess an individual’s creditworthiness. If an individual's name appears on this list as a defaulter, it can have a negative impact on their credit score and make it more difficult for them to get additional loans or credit in the future. Being identified as a CIBIL defaulter can have major consequences for an individual's financial situation, so it's critical to keep a good CIBIL score and avoid falling into this category.

Steps To Remove Your Name From CIBIL Defaulter’s List 

To guide you, the following are some key points to consider in order to remove your name from CIBIL's defaulter list:

1. Review Your Credit Report:

Check your credit report for discrepancies on a regular basis to maintain track of your credit score. If your credit score falls, you can figure out why and then rebuild it. If you find an error in the report, please contact CIBIL using the details on their website. You can conduct this CIBIL score check how many times you want to.

2. Clear All Your Outstanding Dues:

The best way to improve your credit score is to pay off all outstanding bills promptly. Talk to your creditor about it and work out a payment arrangement. Pay off your bills and keep a track of your credit report to see if it has been updated.

3. Pay Your Bills On Time:

Late or missed payments can harm your CIBIL score for personal loan and raise your chances of being identified as a defaulter on the CIBIL defaulter's list. Consider setting up automated bill payments through your account or service provider to avoid missing payments. Even if you forget, this will ensure that your expenses are paid on schedule each month.

4. Stay Within Your Credit Limit:

A high credit utilisation rate, or the amount of credit you are using compared to your credit limit, might raise red flags for lenders and credit bureaus, lowering your credit score. Check your credit report and credit card bills on a regular basis to keep track of your credit usage. Try to maintain your credit utilisation below 30% of your credit limit. This will give you a good CIBIL score.

5. Do Not Apply For Multiple Loans At A Time:

Applying for many loans in a short period of time could suggest that you are in financial trouble and fighting to make ends meet. This can lower your CIBIL score for personal loan. Consider your financial status and prioritise your financing requirements. Determine which loans are most important and prioritise obtaining them. If you must apply for many loans, try to spread them out over a longer period of time.

Must Read: Credit Score vs. Credit Report - Know What's the Difference?

Conclusion

Finally, being labelled as a CIBIL defaulter might have major ramifications for your credit score and your credit profile. It is critical to recognise that establishing and maintaining a decent credit score requires time and work. However, by being proactive and careful with your finances, you can increase your chances of being considered a low-risk borrower and avoiding being identified as a CIBIL defaulter. You may create a bright financial future for yourself by committing to appropriate financial behaviour.

SMFG India Credit provides personal loans to individuals having a CIBIL score for personal loans of 750 or above, as long as they meet the eligibility requirements set by the lender. However, it's important to note that meeting the minimum CIBIL score requirement does not guarantee loan approval, as there may be other factors that lenders consider before making a final decision.

With affordable personal loan rates starting from 11.99%* per annum and flexible payment terms, we have been able to serve millions of consumers across India thanks to our customised solutions and transparent processes. Visit our website to apply for a personal loan, NOW!

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