Navigating the world of credit can be a daunting task, especially when you come across unfamiliar terms like ‘written off’ in your CIBIL Report. But what does it mean when a loan is written off? And how does it impact your CIBIL Score? Let’s dive into these questions!
What is ‘written off’ in CIBIL?
A ‘written off’ status in theCIBIL Report appears when a borrower has not been able to make payments against their outstanding loans for more than three months. This status can have adverse implications for their credit score and future borrowing capabilities. This is because it compromises trust in future financial dealings by indicating to future creditors that the borrower is not trustworthy with money.
The lender gives up on recovering the outstanding amount from the borrower and removes the amount from their books as an asset. In such a situation, they are required to ‘write off’ the amount in question and report it to CIBIL as ‘written off’ for it to be recorded as such on the borrower’s CIBIL Report.
How to clear ‘written off’ status in CIBIL Report
Here are the steps that a borrower must take to clear or remove the ‘written off’ status from their credit report:
Identify the issue: The initial step involves identifying the issue by thoroughly reviewing your CIBIL Report. Look for any accounts labelled as ‘written off’, indicating that the lender has relinquished efforts to recover the outstanding amount from you.
Contact your lender: If discrepancies, such as a ‘Closed’ account erroneously marked as ‘written off’ are identified in your CIBIL Report, promptly get in touch with your lender. Engage in a discussion to comprehend the issue and determine the necessary steps for rectification.
Repay the outstanding amount: Clearing the ‘written off’ status necessitates repaying the entire outstanding amount, encompassing the principal, accrued interest, and any additional charges.
Obtain a No Dues Certificate: Following the settlement of all dues, request a No Dues Certificate from your lender. This document serves as evidence that all outstanding amounts have been settled.
Request a CIBIL update from your lender: Subsequent to obtaining the No Dues Certificate, petition your lender to update this information with CIBIL. Ensuring that your lender promptly reports the resolution to CIBIL is crucial for the timely update of your credit report.
Verify your CIBIL Report: After a reasonable duration, re-examine your CIBIL Report to confirm the removal of the ‘written off’ status. This step is essential to ensure that the necessary corrections have been duly reflected.
Raise a dispute with CIBIL if necessary: In the event that the ‘written off’ status persists on your report despite settling all dues and your lender’s reporting to CIBIL, take the initiative to raise a dispute with CIBIL for resolution.
The best way to avoid getting a ‘written off’ status in your CIBIL Report is by managing your finances well and keeping a close eye on your credit health. The Bajaj Finserv Credit Pass can help you do just that. It offers features like the personalised credit dashboard that allows you to track all your credit accounts in one place while highlighting the factors that influence your credit score, such as your upcoming repayment deadlines. Use the Credit Pass to get real-time insights into your Credit Health Report and check your CIBIL Score every month. Regularly monitoring your credit profile in this way will allow you to immediately identify issues and get them rectified to safeguard your score.Sign up today to gain unlimited access to all Credit Pass.
It is essential to maintain a clean CIBIL Report for a good credit score to avoid obstacles going forward in securing the credit you need. Remember, financial discipline is key to avoiding such situations.
