Having late payments from CIBIL report can prove detrimental to your credit score, and indeed is something that requires your attention. If not addressed in time it can snowball into a much bigger, more significant problem that not only affects your credit report but your overall financial fitness in the long run.
What is a CIBIL report?
A credit report provided by CIBIL, India’s oldest credit information company or bureau is known as the CIBIL score. It is the fundamental document lenders access when determining whether to extend any credit facilities to a borrower as it helps them gauge just how risky a customer may prove to be.
This report details information pertaining to any loans or credit cards that you have availed of, and your repayment behaviour is emphasised upon. Hence, ensuring that you do not have a pattern of late payment on your record is crucial.
While you can request for a copy of your CIBIL report, it is currently not offered as a free service. Upon payment of a small fee, the report is made available by way of a quick, hassle-free process.
What is defined as a late payment?
Let us take an example – Borrower A has a credit card, which has a payment due date of the 25th of each month. When Borrower A makes a payment any day after the due date, the payment is considered to be a late payment. Simply put, therefore, any amount outstanding past the due date will be a late payment once received by the lender.
However, for the sake of categorization, lenders universally slot late payments into buckets, denoting how many days past due (or DPD) they are. These buckets are tagged at 30, 60, 90 and 120 days past the due date, and the more number of days past, that much more serious is your problem.
Impact of late payments on your CIBIL report
Sometimes, a person defaults on a loan or card payment simply because they have forgotten the due date. In most other cases however it is a willful default wherein the borrower does not intend to pay the amount owed to the lender.
Whatever be your reason for delaying a payment, know that your credit report does not consider the same, and every late payment is meticulously captured in the document. Of course, data received by bureaus is only that sent by its member institutions (banks and other financial institutions) and bureaus do not generate any information on their own. Hence, the moment your lender updates your account with a late payment remark, the same is transferred on to your bureau report.
Delaying a payment or missing it as a one-off instance will have a short-term, immediate impact on your CIBIL rating, it is true, but not as much as a regular history of payment defaults would. When you are 90 DPD, for example, your record is already tarnished, and building your score back up is a tedious exercise, one that takes time and patience. When you go as much as 90 days past the due date, it conveys to a lender that you have not only defaulted on payment once – and for a relatively long period – but are likely to do it again. In most cases as a global standard, late payments stay on record for a period of 7 years. Hence while erring may be simple, it is far more complex to rebuild your score.
How do you remove late payments from the CIBIL report?
In order to know how to clear CIBIL issues, you first need to identify them in your CIBIL report; hence calling for a copy is your first step in the process. Once received, go through it carefully and check for any errors or inaccurate information, which includes late payments.
If your late payment is on account of having forgotten the payment due date, you can request for the information to be struck off on the basis of goodwill, which is known as a ‘goodwill adjustment’ to lenders. If your credit history – and most importantly, your repayment track record – is otherwise good, a lender is likely to consider this favourably and delete this information from their records. Once they send this revised update to the bureau, your record is struck clean. Of course, this is purely at the discretion of the lender and your relationship with them, so even when you do send a letter, do not assume that it will be automatically done.
Further, if the information in your report is accurate, chances are that the lender is unwilling to strike it off your report without any assurance from your end. Therefore, some lenders globally request for the borrower to sign up with their banks to ensure auto-debit towards payment on the due date. On doing this, they are willing to consider erasing the late payment record. However, as with a goodwill letter, this depends solely upon the lender.
You can also negotiate with the lender with regards to making either a partial or full payment towards the amount outstanding, thereby not only reducing your debt burden but also having the late payment record struck off.
However, do keep in mind that a late payment is not looked upon favourably by any lender, and getting the remark struck off from your credit report can be an uphill task.
Follow up is the key
When you request for removal of late payment remarks from your report, follow up with the lender to keep periodically checking the status. Once the lender agrees to removal, it can take up to a month (or sometimes longer) to have your credit report updated with the new data. Hence, do call for your credit report and check the details yourself.
Note-This is a guest post written by Arun Ramamurthy, author of “Unlock the Power of Your Credit Score” : India’s first book on credit scores.
BasuNivesh in no way associated with the author or the organization he represents. Also, we not received any monetary benefit for publishing this post. This is purely based on knowledge sharing purpose.
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View Comments
My dad had taken a phone on me in 2016 and only made 1 payment of 7k now my cibil score is 407 and i have 74late payments and overdue of 12k does it clear if i pay 12k
Dear Spandhana,
Not imemdiately.
Dear sir,
I have used in March 2021 loan application where I got loan but that time I completed my loan amount but now a days overdues is showing so please suggest how to I remove this
Dear Gunendra,
Approach the bank for this.
Hi Basavaraj Tonagatti
My self Ashok, i had used the loan applications lot in 2019-2020,Now i have one issue with Credit score. As per my civil report i missed the payment of 99rs for one lender but as i remember i cleared all the loans and i am not aure that i took the loan from that platform which name is NDX P2P Private Limited and the Account Number also starts with "PL".
HERE my issue is i can't able to found this Loan application to clear it, if i wanted to transfer to account i don't know the bank .
Is there any possibility to close / clear this amount to fix it.
Dear Derangula,
Contact the lender immediately.
Hello Sir,
I took a consumer durable loan for my friend in 2013 and after few payments I stopped payment and now I approached IDFC they denied to update cibil even for 28k I am paying full amount of 1.72l. They are saying we will close the account but cannot remove written off status. Is there any way we can approch consumer forum or banking ombudsman as we are paying the complete writeoff still they are not ready to change. What should be the right approach. Your help in this matter is highly appreciated.
Dear Sounak,
Sadly NO.
Hi Sir,
If I had 1 personal loan and 2 credit cards not paid for more than 2 years due to loss of job and financial issues. But now as things are back to normal, I want to foreclose everything. Will it improve my cibil score?
As banks are stating once they provide me Foreclosure letter it will improve.
Please assist me.
Dear Shivani,
Yes, but not instantly along with closure to increase rating, you have to use credit card frequently or go for loan and pay it without missing.
I had a personal loan in Aditya Birla. I have done BT from Yes Bank and closed the loan in the month of September 2021 also I have received the NOC from Aditya Birla. But in the Cibil report still Aditya Birla loan is reflecting as active. How to remove this from my Cibil report..?
Dear Mohan,
Either wait or approach the lender to rectify it.
Hi Baswaraj,
My CIBIL score drop from 699 (In March 2021) to 620 (April'2021) when it's get updated.
as i am aware, i have not done any major changes in my transaction behavior, but i made some house loan application in the month of March, do you think it is the reason to drop my credit score from 699 to 620?
and my second question is, I was guarantee for one of the person loan (OD -Over draft) taken by my father, but unfortunately due to pandemic & with other reasons it was late payment of 60 days for the consecutive years 2019 and 2020, and it's reflecting in my CIBIL, Now we are planning to clear the balance amount & close this account.
But i don't want show this delay payment (60 days DPD) in my CIBIL-could you please suggest that how can remove this 60 days DPD in my CIBIL.
can i request bank to clear this in my CIBIL ?
or do i have any other option to proceed, so that the 60days DPD should not show in my CIBIL.
Thanks in advance.
Dear Siddu,
"do you think it is the reason to drop my credit score from 699 to 620?"-MAY BE.
How can you stay away from the delayed payment responsibility? It will obviously reflect in your score.
My cibil is above 720, but my account is updated as LSS since I paid my education loan after many years. How can I rectify it?
Dear Jennifer,
Approach the CIBIL and also bank in this regard.
How to approach CIBIL? I am not getting housing loan. Is there any bank who don't mind this status
Dear Jennifer,
You will find the details on CIBIL website.
Hi,
Is there a grace period in case you have missed ur due date?
And in case where u had opted for moratorium but bank has still marked DPD 3 and is asking for proof, but I never received any proof. Have two cards from sbi and they say for Tata card I have first moratorium part and for prime I have second moratorium. But I has opted for both cards
And this 3 days DPD has effected my cibil I have been following up for more than 2 months is there anything else I can do?
Dear Manash,
There is no such grace period.
Hv taken a personal loan frm nbfc bank and the amount was very less 15k fr 3 months..The payment was made on time ..Nbfc company has sent a report to cibil tht the payment of 5k is overdue..i hv sent a email to nbfc company inspite of several reminders still no response..nw my cibil score hs dropped frm 740 to 680 ..kindly suggest me
Dear Nithya,
Follow as suggested during our call.