How do I check if my name is on the CIBIL defaulter list?
It is important to know that there is no such thing as a CIBIL defaulter list. There used to be a defaulter list earlier, but it no longer exists. Neither CIBIL nor any of the other credit rating agencies issues a defaulter list. If your loan application is rejected by a bank, then the reason is probably due to a low credit score caused by a poor repayment record.
When you apply for a loan, banks obtain a copy of your credit report from one of 3 credit bureaus (CIBIL, Equifax or Experian) to evaluate your application. If you have a poor credit score and a history of failing to make repayments, banks are unwilling to take the risk of lending to you. They will turn down your application after seeing your unsatisfactory payment record on your credit report.
How can I remove my name from the CIBIL defaulter list?
As mentioned before, there is no single list issued by CIBIL on defaulting borrowers. The only way you can avoid loan rejection is by improving your credit score and rebuilding your credit profile.
There are two things you can start doing immediately which will help you improve your credit profile and make banks more willing to lend to you.
a. The most important thing you can do to improve your score is to fulfil all your loan/credit card obligations on time and in full. Do not skip or delay even a single payment. Making timely repayments on all your loans and credit card obligations will have an immediate positive impact on your credit profile.
b. You should try and pay off all your overdue payments and eliminate any accounts that are in a ‘Written-Off’ or ‘Settled’ status. Both these labels signify that you have not been regular with your payments. Any outstanding on your loan or credit card is a big drag on your credit score. Though it might initially seem difficult to find the money to pay them all off, it is a good idea to negotiate with each of your lenders to try and arrive at an amount – based on your income and affordability - to pay off all your dues.
The longer you wait, the more interest continues to pile up and you will end up having to pay a much larger amount to clear your dues. Simultaneously, even as you postpone payment, your credit score continuously decreases. In fact, there is no advantage in putting off repayments on your loan/credit card outstanding – only disadvantages. Paying it off will be a huge step in improving your score and loan-eligibility. Having a ‘Closed’ status on all your past loans will improve your score and help rebuild your credit health.
What are the ways I can wrongly appear as a defaulter?
You might wrongly appear as a defaulter because of administrative errors on your credit report such as wrong name/spelling of name, date of birth, gender, PAN number, or address details. A mismatch between your actual information and wrongly reported details on your report could lead to being noted as a default.
You could also be a victim of fraud or identity theft, where someone has used your ID details to secure a loan and defaulted on them.
How can I correct these errors?
The first thing you should do is to obtain a copy of your credit report to check for any administrative or reporting errors. (For instance, you might have paid up your loan in full but it is still shown as outstanding.) File a dispute with the credit bureau to get the errors rectified immediately. You can do this online as well. The credit bureau will coordinate with the concerned bank to get your updated details. It takes a minimum of 30-45 days for the change to appear on your report. Make sure that you follow up until you see the changes reflected in your report.