How to Remove Your Name from CIBIL’s Defaulter List

Whether you’re applying for any loan or a credit card, your credit score is one of the few factors that represent your creditworthiness. It is an important parameter on which a creditor evaluates your repayment capacity. Since your credit score plays an essential role in getting you a loan, it is important that you never come across as a 'CIBIL defaulter'.

If you have been rejected for a loan or credit card, it is most likely due to your lower credit rating. If you’re wondering whether your low credit score has put you in the ‘CIBIL's Defaulters List’ then here’s the thing – CIBIL (Credit Information Bureau India) does not maintain a defaulters list. In fact, no credit bureaus do so.

CIBIL’s primary role is to gather and preserve an individual’s payment records related to loans and credit cards. Every month, these payment records are reported by the Member Credit Institutions, which includes various financial institutions such as private banks and other lenders. An individual’s loan approval depends on the credit policy of a credit institution such as banks. When you apply for a loan, these credit institutions evaluate your credit score and credit history to identify possible discrepancies that may be present against your name.

So, if you want to save yourself from being labelled as a ‘Defaulter’, you need to maintain a healthy credit score. To help you with the same, the following are some of the important points to remember to remove your name from CIBIL's defaulter list:

  • Review Your Credit Report:

    Thoroughly examine your credit report, this will help you to understand the discrepancies if there are any and will also ensure that your details in the report are correct.

  • Clear Off Your Outstanding Dues:

    The best way to improve your credit rating is to clear off all your outstanding dues on time to clear your dues, you can talk to your creditor and chalk the way out. Once your dues are cleared off, wait for 3 months and again review your credit report to check whether the same has been updated or not.

  • Do Not Exceed Your Credit Limit:

    Try to spend no more than 30% of your credit limit. This will always keep your credit score healthy.

  • Do Not Apply for Multiple Loans and Credit Cards at One Time:

    If you apply for multiple loans and credit cards within a short time, it signifies that you are hungry for credit. Lenders become doubtful about your ability to repay and they might reject your credit application. Each rejection further decreases your credit score. Therefore, you should apply only for one loan or credit card at a time. This makes for easy payments and presents a higher possibility of getting your credit application approved.

What can be done to not be on the defaulter's list?

The following things can be done to not be on the CIBIL's defaulter list:

  • The information you need regarding the CIBIL defaulter's list is the Control Number (CN). Every time a financial institution asks for your CIBIL report, a CN will be generated. A CN is a nine-digit number that makes your credit report easily available and traceable.
  • If you want to improve your credit score or remove your name off the list, you must find out your credit information report (CIR). This will enable you to check any advance/ credit that you may have defaulted on. From there, you can take steps to rectify the situation so that you can remove your name from the defaulter's list.
  • One thing you can do immediately is to avoid having multiple credit cards. Too many credit cards will imply that you are highly in the need for credit that makes the chances of defaults very high.
  • You must also check whether the outstanding loan amount and Days Past Dues (DPDs) reflecting in your CIBIL report reflect the true story.
  • Last but not the least, make all payments related to your credit outstanding in punctually. Forget what you have done in the past and start making equated monthly instalments (EMIs) payments on time. This will improve your credit score, even if it is not in a very good shape currently.

These are the ways following which you can remove your name from CIBIL's defaulter list and boost your chances of credit approval.