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Can I remove my name from CIBIL™?

First, it is important to note that there is no `Defaulters List` that is maintained or circulated by CIBIL™ or any of the other credit bureaus or banks. If you have been rejected for a loan or credit card, it is probably because you have a low credit score which is caused by your poor record of repayments. Banks and other financial institutions do not want to give credit to customers who have a history of missed or late repayments.

CIBIL™ is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark.

The only way you can ensure that you are not rejected for a loan/card is by improving your credit score to 750 or above to show that you are a responsible borrower who pays off debt obligations on time. Below are some tips on how you can improve your score and demonstrate that you are a financially responsible borrower. It can take 4-12 months to improve your score, depending on your individual credit situation, but the reward of having a good score is a lifetime of quick and easy access to credit.

How can I improve my credit score so that my application is not rejected?

Obtain your credit report immediately : When you read your report, you may find errors that are unnecessarily dragging down your score. For example, even after you have fully paid your loan with interest, it might be shown as outstanding due to a reporting or administrative error. If there are any errors in your credit report, you can file a dispute to correct it. This will result in an immediate increase in your score.

Similarly, there may be instances of fraud that are bringing down your score for no fault of yours. For instance, you might notice a loan in your name that you have not taken. It is important to report any instance of suspicious activity and get it rectified at once. This will also have an immediate effect on your score.

Pay off all your dues if possible : Having outstanding dues or a “Written off” or “Settled” status on your credit report is a warning signal to lenders that you do not fulfil your debt obligations. Most lenders will reject your application if they see this on your credit report. Talk to your existing lenders (banks, credit card companies or other financial institutions) and pay off all your outstanding dues so that your loan accounts are converted to “Closed” status.

You can negotiate with your lenders on the amount you need to pay, based on your income and affordability. It can take up to 3 months for the status to be changed on your credit report so it is important to check your report to ensure that the new status is reflected accurately.

Make sure you pay your bills on time : This is the single most important thing you can do to improve your score. If you make all your loan and credit card repayments on time and in full, it will have a significant positive impact on your score. Even a single missed or late payment affects your score adversely. Your payment record forms up to one third of your credit score, so if you make every payment on time, you will quickly improve your score. So start making your payments in time right away and see the resulting improvement in your score.

Ensure you limit your spending to 50% of your card limit : Make sure you don’t exceed more than 50% of your credit card limit at all times. For instance if your limit is Rs 1 lakh a month, limit your monthly spending to Rs. 50,000 or less. This will have a positive impact on your credit score. When you consistently spend more than 50% of your limit, it signifies a lack of spending discipline, and will have a negative impact on your score.

Do not apply for multiple loans or credit cards at the same time When you apply to multiple lenders for loans or credit cards within a short period of time, it signifies that you are ‘hungry’ for credit and need to apply to various sources simultaneously. Lenders become nervous about your ability to repay and might reject your application. Each rejection further decreases your score.

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