A credit score is very important for everyone be it for a credit card application or loan. A good credit score can help you get a loan of the desired amount with a better scope for negotiation about the interest rates with the creditors. The same is not the case if you have a low credit score. A lower credit score will impact your chances of even qualifying for a loan let alone negotiating interest rates. Even if you do get qualified for a loan, you will get the loan at a high-interest rate.
A healthy credit score is not so hard to maintain, the only thing to follow is to keep your payments on time. When you make any purchase make sure that you are only buying stuff that you can pay back for before the due date. When a creditor looks for your credit score, “CIBIL Defaulter” status is something a creditor would not like to see. This term is something that you should avoid at all costs due to its consequences on your financial life.
What is CIBIL?
CIBIL or TransUnion CIBIL Limited is a credit information company, being regulated in India. CIBIL maintains the credit history, score, etc, and makes a credit report of its users. It maintains more than 600 million individuals and 32 million business credit details. The CIBIL issues a credit score upon checking all these details and rates the user credit accordingly. The credit score by CIBIL is determined on a scale of 900 out of which 750 is good and 720 is decent.
What is the CIBIL Defaulters list?
CIBIL also maintains a defaulters list where it has the data of all the people who were unable to make the payments at all. There are two types of marks stamped by the creditors on your report, these are mentioned as closed and settled. Closed status means you have cleared your loan and no dues are pending. However, the status settled can be unsettling as it indicated the bank settled for the amount the user can pay, rather than the whole. The status settled can present you as a defaulter and your name can end up in the defaulter’s list.
Being a defaulter, you will be further categorized into two different categories which are, wilful and non-wilful. These categories are to determine the people who are genuinely in debt from the ones who wilfully forgo their repayments. These are two different types of defaulters, although both these are defaulter but the first type can get out of the list rather than the latter type.
You must keep yourself out of the defaulter’s list if you wish to keep your financial status stable in society. This will also keep you safe from any legal actions from the creditors.
Tips to get yourself out of the CIBIL Defaulters list –
There are a few tips that you can follow to keep yourself out of the CIBIL Defaulters list, which are as follows –
∙ Keep yourself up to date on your bill payments and your bills due. This will help you track your credit health and check for any upcoming bills.
∙ Make the payment of the total bill every time you make the payment. If you pay a minimum due, you will be left with an outstanding balance which will then get interest rates on the same which will become higher.
∙ Make sure to make the payments on time. If you make late payments, it can incur late fee charges along with interest rates, harming your credit history as well make making the debt amount go up.
∙ Look for errors in your credit report which can harm your score. Check your credit report time-to-time thoroughly for any errors present in your report. Sometimes there are errors present that not only impact your score but can also make you lose your chances of qualifying for loans and get you into the defaulter’s list.
Credit scores are some of the key factors to avail of a credit card or any financial aid. Creditors see your credit score as the score for making your payments on time, repaying the full debt, and having a good credit history.
The credit score is determined out of 900 when CIBIL presents the score out of which 720 is a decent score. Your credit score can help you get financial aid with a reasonable interest rate which is negotiable. A good credit score means good financial stability which is very important in today’s fast-paced life.