CIBIL defaulters list, explain the role of credit bureaus, and learn various ways to improve your CIBIL score.
CIBIL Defaulters List
It has always been a subject of confusion, whether the CIBIL defaulters list is a document that contains information of borrowers who have defaulted in the past or not. It is merely a misconception among people that the CIBIL defaulters list comprises credit defaulters. However, the fact is, there is no such term known as a credit defaulters list. The credit bureaus or Credit Information Companies (CICs) in India do not maintain any type of credit defaulters list. Even TransUnion CIBIL does not maintain or compile a list of defaulters or CIBIL defaulters list.
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The primary task of credit bureaus is to generate credit reports and credit scores, as per the consumer credit information provided by the lending institutions on a monthly basis.
If you are unaware of your credit score and want to check it for free, you can visit the Paisabazaar’s online platform and check your credit report/credit score and receive monthly updates in your preferred language. This practice shall help you notice the areas of improvement and help you in availing credit.
Further, we shall discuss various misconceptions and misunderstandings related to the CIBIL defaulters list, explain the role of credit bureaus, and learn various ways to improve your CIBIL score.
Understanding the CIBIL Defaulters List
In simple terms, the leading credit bureaus in India, such as TransUnion CIBIL, Experian, Equifax, and CRIF High Mark do not maintain any credit defaulters list. The sole objective of these Credit Information Companies (CICs) is to compile and manage the credit information of consumers, as provided by the banks and NBFCs periodically, to generate credit reports and credit scores. Remember that your credit score is considered one of the key components of your credit report by the lending institutions while assessing your creditworthiness and repayment capacity.
How to check or remove your name from the CIBIL Defaulters List
You shall not be able to check or take off your name from the CIBIL defaulters list, as it does not exist. However, if you want to check any payment default (missed or delayed payment); you may check it at Paisabazaar’s app or website or by visiting the official website of TransUnion CIBIL. You can check your credit records for up to 7 years, as the credit bureau keeps your payment history until seven years.
Role of Credit Bureaus in India
The main objective of credit bureaus in India is to offer credit information of borrowers to lending banks and other financial institutions regarding their creditworthiness, repayment history, outstanding debts, credit utilization, credit inquiries, etc. Credit bureaus in India are regulated by the Reserve Bank of India (RBI) and governed under the Credit Information Companies (Regulation) Act, 2005. Credit bureaus help lenders make informed lending decisions by providing relevant information about the applicant. CICs assist applicants in understanding and managing their financial health. They also help in preventing fraud that might occur due to irregularities in payments by individual borrowers or companies under debt. It also assists borrowers in accessing their credit more responsibly and efficiently.
Ways to Improve Your Credit Score
Maintain a healthy credit score to avail credit products at competitive interest rates. To improve your credit score, follow these steps dedicatedly to witness a gradual increase within a few months:
- Paying off all loan EMIs and credit card dues on time
- Clearing all of your outstanding dues to get a ‘No dues certificate’ from the lender
- Monitoring your credit report regularly for errors and resolve them at the earliest
- Cautious use of your credit limit – Do not spend over 30% of your total assigned credit limit
- Avoid Write-offs on your debts, as it diminishes your credit score drastically
- Do not apply for multiple credit products in shorter duration
- Maintaining a good credit mix of secured and unsecured loans – Prefer collateral-based credit products
- Avoid being a guarantor or co-applicant for any loan
Key Takeaways:
By now, you must have a fair idea that there is no such thing known as the CIBIL Defaulters List maintained by credit bureaus. These organizations contribute to gathering and compiling credit information that might affect your credit score. Your primary objective is the regularly check your credit report for errors and try maintaining it more than 750 and as close to 900, as your higher credit score enhances the possibility of loan approvals at competitive interest rates. This could be achieved by following the above-mentioned measures and not defaulting on any loan EMIs and credit card dues. Therefore, enhance your credit score and remain credit-healthy to be financially secure and lead a stress-free life ahead.
Disclaimer: The information provided on the Website does not constitute investment advice, financial advice, trading advice, or any other form of advice, and you should not interpret any of the financial content as such. Please conduct your own due diligence and consult with a financial advisor before making any investment decisions. Midday does not endorse or promote any such activities, and you access them at your own risk, fully understanding the monetary and legal consequences involved. Midday shall not be held responsible for any losses you may incur as a result of using any such apps or websites.
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