Remove Bad Repayment Track from CIBIL

When a borrower avails of a loan, lenders decide the interest to be charged after considering several different factors such as age, nationality, employment type, and income. Another important factor that they consider is your CIBIL score.

The CIBIL score is the numerical representation of a borrower’s creditworthiness and repayment capacity. It is a three-digit number between 300 and 900 that tells a lender the chances of a borrower defaulting on loan repayment.

You may ask what is a good CIBIL score for Home Loans or any other loans. The answer is a score of 750 and above. In fact, the closer you are to 900, the better your chances of getting approved for a loan and your preferred lender offering you lucrative terms and conditions, such as low rate of interest, higher loan sanction, and long repayment tenor.

A good CIBIL score can improve the chances of loan approval and a low CIBIL score can increase the chances of rejection. Missing EMI payments, defaulting on loans, constantly exhausting one’s credit cards, and continuously applying for new credit are habits that cause borrowers to have a low CIBIL score. What should you do if you check your CIBIL score online and find your CIBIL score does not meet your lender’s loan qualifying criteria? How can a borrower improve their credit score and remove a bad repayment track from their CIBIL report? Read on to know the answer.

Identifying a Bad Repayment Track From CIBIL

The most important factor that affects a borrower’s credit score is their repayment history. Repayment history records whether you have always paid your EMIs on time or have ever defaulted on loan repayment. Factors such as credit utilisation ratio, credit mix, and new credit applications also affect a borrower’s credit score. Sometimes unfavourable conditions may disturb your financial planning causing you to miss the EMI payments, default on loans, and exhaust the limit on one’s credit card. In such cases, you may wonder what the ideal score for applying for a Home Loan is and if a bad repayment track in the CIBIL report can affect your chances of getting approved. 

If you are planning to apply for a Home Loan or a loan of any kind and do not have the right CIBIL score for it, follow these steps to eliminate a bad CIBIL report.

• The first step is to identify the entry or mention in your CIBIL report that is decreasing your credit score. For this, you will have to get hold of your credit report. Borrowers can check their CIBIL score online as well as their CIBIL report for free. However, if you want to identify and remove a bad repayment, you must avail of your CIBIL report directly from TransUnion CIBIL. To be able to do this, you will have to fill out an application form on the company’s website and pay a small fee based on the subscription plan you have chosen. Once you do this, CIBIL will send you your detailed CIBIL report.
• If the bad repayment you have identified is due to an error, report the error to CIBIL and request them to remove it as soon as possible. If the negative repayment record that you have tracked down is due to the EMIs you have missed or a fault on your own, you will have to talk to CIBIL and request them to remove the record from your CIBIL report. You may even be required to pay a small penalty fee. CIBIL is not authorised to remove errors like this. Therefore, getting the bad repayment track removed won’t be easy. So, be patient and follow up with CIBIL as often as you can.

Borrowers should know that though they can contact CIBIL and request the credit information agency to remove a bad repayment track, there is no guarantee that CIBIL will remove it. Therefore, borrowers should know how to avail of a loan even if they do not have an ideal CIBIL score for a Home Loan.

Also Read: How to Increase Your CIBIL Score Above 800

How to Avail of a Home Loan if You Have a Low CIBIL Score?

If you check your CIBIL score online and find out it is much below 750, do not worry. By the tips given below, you may be able to avail of a Home Loan at favourable terms:  

• Try improving your CIBIL score by following healthy credit practices diligently. Improving your CIBIL score involves timely bill payments, reducing credit card balances, avoiding multiple loan applications, and checking your credit report regularly for errors or discrepancies to rectify them promptly. 
• To increase your chances of getting approved for a loan, apply for a loan amount lower than what you are eligible for. This will increase your lender’s confidence in your repayment ability, and they might approve your loan even if you have a low credit score.
• You can also get approved for a loan even with a low CIBIL score by adding additional income sources to your loan application. The idea is to convince your lender of your repayment capacity.
• If you have a low CIBIL score and you wish to avail of a Home Loan, add a financial co-borrower or guarantor. This financial co-borrower or guarantor must be someone with a high CIBIL score and excellent repayment capacity.
• Yet another thing you can do is take a small loan amount and pay it on time. This will help you improve your credit rating over time and increase your chances of availing of a Home Loan on beneficial loan terms and conditions.

Read Also: Everything Need to Know About How to Check Cibil Score 

Final Words

If you are planning to apply for a loan of any kind, be it a Home Loan, a Loan Against Property, or a personal loan, know that a good CIBIL score will help you get approved for a loan. However, if you do not have the required CIBIL score, do not worry. If your CIBIL score has decreased due to an error in your report, dispute the error immediately. You can also request CIBIL to remove the error due to which your credit score has decreased. Use various tips given in this article to enhance your chances of getting approved for a Home Loan.