For How Many Years Will CIBIL Keep A Record Of Defaulters?

Was there a time when you missed an EMI payment on your loan? If yes, this has been recorded by the credit report agencies, which might leave you on the list of defaulters too. Your CIBIL credit score plays a significant role in accessing credit products, and any missed repayments can stay on your credit report for a specific period, impacting your score. Lenders use this information to evaluate your creditworthiness, making it crucial to maintain a clean CIBIL credit report for better financial prospects. So before proceeding with solutions to manage the credit score, let us understand the details about the defaulters' list.

What Is The CIBIL’s Defaulters List?

TransUnion CIBIL maintains the CIBIL Defaulters List; however, it is compiled by the Reserve Bank of India (RBI). In 1997, the RBI mandated financial institutions, banks, and NBFCs to share a list of loan defaulters with outstanding amounts of Rs. 25 Lakh or above. Loan defaulters are classified into two types: non-wilful, facing financial difficulties, and wilful, deliberately not repaying despite having the means. The RBI's list of wilful and non-willful defaulters is available to the public yearly on its official website, and the CIBIL Defaulters List comprises names from the RBI's list. The lenders may find your name on the list if you fail to repay your dues on time.

CIBIL retains an individual's financial history for seven years. Lenders use this information to assess creditworthiness. CIBIL cannot remove names from the defaulter's list, so improving your credit score is important if you find yourself on it.

Affect On Loan Applications:

There isn't a separate CIBIL score defaulter list, as credit rating agencies and CIBIL don't issue one. When applying for credit, lenders request your credit score from the bureau. A poor credit score due to bad repayment history may lead to credit rejection. However, some lenders might still approve loans despite bad CIBIL scores. Factors like a good salary, a spouse with a good credit score, specialized credit bodies, and peer-to-peer lending options can offer alternatives for loan approval, although with higher interest rates and smaller loan amounts.

Can I Remove My Name From The List?

While there is no official CIBIL defaulter list, being marked as one can adversely affect your credit status. To improve CIBIL score and potentially get your name removed, follow these steps:

Review Your Credit Report:

Check for mistakes or inaccuracies and ensure all information is correct and up-to-date.

Clear Outstanding Debts:

Focus on settling all dues to improve your credit report. Communicate with lenders if you face financial constraints to find a feasible solution.

Timely Payments:

Consistently pay loan installments and credit card bills before the due date to maintain a good credit score.

Responsible Credit Utilization:

Keep your credit usage within 30% of the limit to maintain a healthy credit score.

Apply For Loans Wisely:

Avoid multiple loan applications and frequent short-term loans, which may signal credit hunger. Instead, apply for one loan at a time for better chances of approval and smoother repayment.

By following these steps and correcting any inaccuracies in your credit report, you can work towards removing your name from the CIBIL defaulter list and improve your credit status.

How Can I Avoid Being On The CIBIL Defaulter List?

Defaulting on a loan can arise for various reasons, like a medical emergency or job loss. To avoid a suit-filed account and protect your credit, consider extending your loan's tenure or asking for an EMI payment deferral from the bank. Seeking assistance and advice is crucial to prevent worsening the situation and suffering from severe legal consequences affecting your credit score. Taking prompt action and communication with the bank can help navigate these challenging times.

Conclusion:

In conclusion, being aware of the consequences of being listed as a CIBIL defaulter is crucial for financial well-being. There's no need to panic if you find yourself among the listed individuals. Take proactive steps to improve your credit score by checking your credit report regularly, making timely payments, and addressing any outstanding dues. At IIFL Finance, we understand everyone deserves a chance to rebuild their creditworthiness. We offer personalized loan solutions to help you on your journey towards financial recovery. Take a loan with us and ensure timely repayments to enhance your credit score gradually. Let IIFL Finance be your partner in this journey towards a better credit score and greater financial stability.

FAQs

Q1.How to delete CIBIL history?

Ans. There is a certain step-by-step procedure to delete CIBIL history. Firstly you need to pay the entire debt amount so that you get a clearance from your bank. Once that’s done, you must get yourself an NOC (No Objection Certificate) from your bank.

Q2. How many years will CIBIL keep record of its defaulters?

Ans. An individual’s financial history is retained by the CIBIL bureau for seven years. This information is used by the lenders so assess creditworthiness, should you apply for a loan. Remember that CIBIL cannot remove names from the defaulter's list, so improving your credit score is important if you find yourself on it.

Q3. How to check defaulters list?

Ans. There's a common misconception that a "CIBIL defaulters list" exists as part of your credit report. However, TransUnion CIBIL doesn't maintain such a list. It must be noted that, the Reserve Bank of India (RBI) keeps a record of "wilful defaulters." These are borrowers who deliberately avoid repaying their loans, even after the due date. Remember that your CCR - CIBIL Credit Report reflects your past payment behaviour, including any defaults. This information, along with other factors, contributes to your credit score.

Q4. How to remove wrong entry from CIBIL report?

Ans. In order to remove a wrong entry, you will have to raise an online dispute with the credit bureau to dispute errors. Visit the dispute resolution section and fill the form to fix the error. You will be required to submit the nine-digit number provided on your credit report, which contains the disputed details.

Q5. Can CIBIL defaulters apply for loan?

Ans. Yes, defaulters can apply for a Personal Loan even if they have a low CIBIL score. However, one needs to understand the terms and conditions of the lender associated with such loans. It is very much possible that these loans may come with higher interest rates, stricter eligibility criteria, and customised terms tailored to one’s financial situation.