How to improve the CIBIL score ??

POSTED BY Jaydeep ON August 24, 2012 11:30 am COMMENTS (19)

 

Hello Mr.Manish,

In 2006 due to my financial mismanagement, i had to face my business failure. During that period i had taken 3 personal loans on my name & 3 on my uncle’s name from different entities. After paying off almost half of the installments, i was unable to make payments on time due to my weak financial circumstances. After 2 yrs. of gap, i approached all the banks & finan. institutes from my end and settled down the loan amounts & paid off all the agreed amounts. Now, i want to settle down in the city where i am doing my present job and i shall have to take a home loan after 2.5 yrs., so whether i would be eligible for that home loan or i shall require to clear up the remaining amount also which is apart from the settled amount ? And after paying off all the loans to full, whether i would be considered eligible for home loan or i shall have to face difficulties in getting a home loan ?? And if i apply for a home loan in any local co-operative bank, will they be sending my application to cibil for credit review ?? Pls. guide.

 

19 replies on this article “How to improve the CIBIL score ??”

  1. VIJAY says:

    HELLO SIR,
    I M VIJAY MY CILL SCORE 738 HOW TO GROW MY SCORE, IN MY SIDE NO ONE LOAN AND NO PENALTY AND MY CREDIT CARD ALSO CLEAR PAY EACH AND EVERY AMOUNT IN BEFORE DUE DATE. SO GUIDE ME

  2. Credexpert says:

    Dear Mr. Roshan,

    a) Every lending institution has to be a member of any one credit bureau. Thus it is a possibility that the bank from where you took the home loan is not a member with CIBIL but a member with any of the other credit bureaus- Experian or Equifax. Therefore it is not being seen on your CIBIL report. However, you may check with the bank if they are a member with CIBIL and in this case you can raise a dispute with CIBIL for updating your home loan information. Make sure you raise the dispute within 60 days of accessing the credit report.

    b) Yes, since the credit card is on your name, you need to make sure the dues are being paid on time by you or the company. Late payments on credit cards with your name will reflect on your credit report and will be viewed negatively by lending institutions.

    c) Firstly, you need to check if the remark ‘Date Closed’ has a date on it. If not, you need to ask the respective bank to update the same. Only then it will be considered as duly closed.

    d) Yes, XXX means the lending institution has not reported the information to CIBIL. Had you been paying the dues on time, it could have worked negatively for you as lending institutions would view on time payments positively. Whereas if you had not been paying on time, it could work positively for you as lending institutions would view late payments negatively.

    Regards,
    Credexpert

  3. ashalanshu says:

    Dear Roshan and Jaydeep, here are answers for your queries.

    a) Only credit cards i have used were included in the report. My existing home loan was not reflected in this report .Should i file a dispute for this?
    It may happen that your home loan is just 2-3 months old and your bank is yet to share the data with CIBIL. Please check the same after a gap of 6 months from here on wards.

    b) The credit cards include the corporate credit cards issued in my name which was used when i had to travel overseas . Now if my company had not settled dues on time would it have reflected badly on me?
    Yes, as the cards were issued in your name, it’s your responsibility to get the dues cleared.

    c) The credit card not in use anymore do not have anything written against the status
    suit filed/wilful default: –
    written-off status :-
    written-off amount(total):-
    written-off amount(prinicpal):-
    settlement amount:-
    This means that the cards were closed properly after paying all dues right?
    Yes.

    d) DPD had entries 000 or XXX . XXX means bank has not given information to CIBIL. will this be considered a negative?
    No. Actually it’s positive as XXX or 000 means no entry is to make here means no DPD.

    Thanks

    Ashal

  4. Jaydeep says:

    Dear Manishji & Ashalji,

    This is exactly what i didn’t understood, mentioned in above comment from Mr.Roshan in c & d part. No status mentioned at all. What to understand with this ??

  5. roshan says:

    I recently got my CIBIL report. I got a score of 797 which is ok i suppose considering a score of 750 and above is needed. I have the following observations

    a) Only credit cards i have used were included in the report. My existing home loan was not reflected in this report .Should i file a dispute for this?

    b) The credit cards include the corporate credit cards issued in my name which was used when i had to travel overseas . Now if my company had not settled dues on time would it have reflected badly on me?

    c) The credit card not in use anymore do not have anything written against the status
    suit filed/wilful default: –
    written-off status :-
    written-off amount(total):-
    written-off amount(prinicpal):-
    settlement amount:-
    This means that the cards were closed properly after paying all dues right?

    d) DPD had entries 000 or XXX . XXX means bank has not given information to CIBIL. will this be considered a negative?

    Thanks,
    Roshan

  6. Jaydeep says:

    Dear Manishji & Ashalji,

    I had mailed my cibil report on your email ids. Thanks.

    1. ashalanshu says:

      Dear Jaydeep, I confirm the receipt of your mail. Please wait for my reply in personal e-mail.

      Thanks

      Ashal

  7. ashalanshu says:

    Dear Jaydeep, please mail it to Manish.

    manish@jagoinvestor.com

    A score above is 750 is at least required for home loan sanction coupled with other things like No written off, no DPD, No settled status in your CIBIL report.

    Thanks

    Ashal

  8. Jaydeep says:

    Hello Manishji..

    As you & Mr.Ashal Jauhari said me earlier, i applied for my complete cibil report and has been received now. My cibil score is 630. The report is quite complicated for me to understand. Is it possible that i could mail you my cibil report on your email id. If yes, please provide me your email id. Pls. tell me how much my cibil score should be to get a home loan, so that i could take necessary steps from now itself to improve it to have good one.

  9. Dear Jaydeep, Good to know that you are learning from your past mistakes or should I say mishappenings. First of all please apply for your CIBIL report & score. Inform us the details & then you & all of us may decide the next action. By the way, after that settlement, are you using any credit card or any other loan to improve upon your credit score as on date?

    Thanks

    Ashal

    1. Jaydeep says:

      Thanks for the guidance. Well at present i am not holding any credit cards and i dont think i could get one at present from any bank. But i am having an savings account in SBI, in which my salary reflects. They have approached me once during my personal visit at branch for the credit card and asked me to do an FD of Rs.20,000/-, and they will issue me a credit card of same value. If my score in CIBIL is worst and i do an FD of Rs.20,000/- in SBI to get a credit card, will they issue me a credit card ?? And if yes, whether the usage of that credit card will help me to improve my CIBIL score ?? I think holding an credit card of SBI itself means of having good credibility. Am i true..??

      1. Yes they will issue you a card based on that FD and you will be able to imporve your score based on its usage , see my reply above

        1. Jaydeep says:

          Ok. Thanks for the confirmation about fd/credit card. I would get an FD from SBI as early as possible to have a credit card and will surely take care to use it wisely.

  10. Co operative banks are members of CIBIL now , and yes , they will enquire from CIBIL about your data and report . Which will not be very good and hence your loan application will be rejected. I suggest not to apply for loan right now .

    1. First check your cibil report and score. See what is the status of those loans . I am sure it would be “Settled”

    2. You will have to pay off remaining amount now , may be more as they would have grown to big amount now . Unless you do this, I dont think you will be getting another loan

    Manish

    1. Jaydeep says:

      Thank you Mr.Manish for the guidance.
      Yes, i also believe that my cibil score is too bad. And i shall have to pay off each and every penny of my loans, which would be quite difficult and even time consuming, but doesn’t have any other option. So, i would definitely apply for my CIBIL report first and then will let you know the present score and other details.
      The amount which i am assuming is around 4 lacks and i think i have to face a big trouble for few years. If i make my present banking strong will it help me to improve my CIBIL score ?? And whether i can get a two wheeler loan on basis of my current banking statement, salary and I.T. return ?? Somehow, if i manage to get a two wheeler loan and if i pay that on time without missing any installment upto the completion of loan period, whether it will help me to improve my CIBIL score ??

      1. the problem is , you will not get any loan unless your report and score is good, and considering your case, it does not look possible for me . Here are the steps for you now

        1. Apply for your score & report
        2. If its good , then everyting if fine , it not , go to 3rd step
        3. Pay off all the loans outstanding asap.
        4. Make a FD for 20k or 30k and ask bank to give you a Credit Card based on that FD (secured credit card), this you need , if you dont have a credit card at this moment
        5. Start using the credit card properly , make sure you spend some amount each month and repay it back (dont use more than 50% of limit on the card) .
        6. Apply for your report and score again later and check your score back
        7. If you score has moved above 750 , apply for loan ,else move back to step 5

        Hope this helps . The issue is your thinking that you can by pass your loan by not paying it .

        Manish

        1. Jaydeep says:

          Dear Mr.Manish,

          As much information i am gaining from you is giving me more & more clarity on this. I will surely follow the steps suggested by you.

          And my questions actually doesn’t mean that i do not have intention to pay off otherwise i had not even settled the loan accounts. But when i had settled up the loans, i was not aware with such serious important factors of cibil otherwise i had preferred to pay off in full at that time. And even the bank’s collection people were suggesting me to settle the loan instead of paying in full, but they didn’t guide me about the cibil seriousness. So i wrongly taken such step. But when i read your article about the CIBIL factors & tips to improve the CIBIL score, i get complete clarity about my doings. I am really more concerned to clear up all my dues and want to boost my CIBIL score back again. I would stay in loop with you sir for your guidance time to time. Thanks.

          1. Ok , always make sure you think logically. If you have taken loan for amount X , then you have to pay X back with interest, anything less than that , is loss to company and it come hit you back in some manner. Think yourself as lender , its logically not correct, to pay less , or settle .

            Manish

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