How to Remove Name from CIBIL Defaulters List?

Many existing consumers and first-time borrowers often have questions about the 'CIBIL Defaulters List' when they check their CIBIL score and report. To maintain transparency, TransUnion CIBIL and other credit bureaus like Experian, Equifax, and CRIF High Mark have clarified that they do not maintain any defaulters list of credit borrowers. Instead, these credit bureaus generate consumer and company credit reports based on credit information provided to them by lending institutions such as banks and NBFCs.

To ensure the collection and distribution of credit information related to loan defaulters, the RBI launched a scheme in 1994. Initially, the RBI gathered information on consumers who failed to repay a collective credit amount of Rs. 1 crore. However, five years later, the benchmark debt amount was reduced to Rs. 25 lakh. The RBI further classified the list of defaulters into two categories: wilful and non-wilful defaulters. It maintains a list of wilful defaulters who owe Rs. 25 lakh or more to any financial institution. This list is then shared publicly with all financial institutions so they can make informed decisions before sanctioning loans.

Steps to Improve your Credit Score

Timely loan repayments

When you take out a loan, you're obligated to repay a specific amount to the lender each month. It's important not to think that missing a single payment won't affect your credit score, as every payment transaction is recorded and reported to the credit bureau. Even a single instance of missing or delaying a loan installment can have a negative impact on your credit history and credit score. If you're looking to improve your credit score or maintain a good score, it's essential to pay your monthly loan payments and credit card bills before the due date. The more consistently you pay your installments on time, the higher your credit score will be. Timely payments demonstrate responsible financial behavior to lenders, which positively impacts your credit score.

Regularly reviewing your credit report

Be sure to regularly check your credit report for any errors to stay updated with your credit score. If you notice a decrease in your score, you can investigate the reasons and take steps to rebuild your credit score promptly. If you find an error in your report, you can contact CIBIL through their website contact details for assistance.

Clearing off all your pending dues

Delayed loan repayment is a significant cause of poor credit scores. When a loan is marked as 'settled' or 'written off' on a credit report, it signals to lenders that the borrower may not fulfill their debt obligations. As a result, loans for individuals with such status are often rejected by lenders. To improve your credit report, it's essential to clear off all outstanding dues as soon as possible. Once all your outstanding bills are paid, check your credit report after about three months to ensure that the new status is reflected accurately.

Avoiding multiple loan applications in short duration 

It's important to avoid applying for multiple loans simultaneously or within a short period because it can be seen as credit-hungry behavior. Lenders may view this behavior negatively, as it raises concerns about your creditworthiness and ability to repay loans. Instead, it's advisable to apply for loans or credit cards one at a time. This increases your chances of approval and makes loan management more manageable.

FAQs

Q. Can I delete my credit history?

Ans. Neither you nor credit bureaus have the authority to delete your credit history, as it's based on your past credit behavior. Your credit history is managed by Credit Information Companies (CICs) like TransUnion CIBIL, Experian, Equifax, and CRIF High Mark. It cannot be deleted but can change based on your payment history or credit behavior. These leading credit bureaus are permitted by the RBI to calculate and generate credit reports and credit scores for individuals and companies.

Q. How to take off your name from CIBIL defaulter list?

Ans. It's important to understand that credit bureaus like TransUnion CIBIL don't create defaulters lists. Therefore, you can't have your name removed from any such list because it doesn't exist. However, you can take steps to prevent your CIBIL report from showing a poor or bad credit score.

Q. How many years will CIBIL keep a record of defaulters?

Ans. TransUnion CIBIL does not maintain a list of defaulters and therefore does not have any record of defaulters. Typically, CIBIL manages records of your credit history for the past 7 years based on the data provided by lenders on a monthly basis.

Q. How to remove a wrong entry from CIBIL report?

Ans. If you want to correct any incorrect information on your CIBIL report, you should check your credit report for errors and submit a dispute to CIBIL through their official website. You can do this by filling out the CIBIL Dispute Resolution form online using their Consumer Dispute Resolution Process.

Q. How can I check my name from the defaulter’s list?

Ans. Since CIBIL does not maintain any defaulter’s list, there isn't a way for you to check if your name is on such a list. If you've missed loan EMIs or credit card payments, you can directly inquire with the lender for information related to your account.