Is CIBIL report really a constriant in receiving home loans?

POSTED BY 8419piku ON March 31, 2012 6:27 pm COMMENTS (4)

Hi,

There have been some in-appropriate charges levied on my credit card due to no fault of mine (ref question in Credit Card section) and hence am considering with-holding on payment of the dues. Have already contacted my credit card issuing bank on the problem but they are yet to revert back.

In case the bank reports me as a defaulter with CIBIL, will it permanently affect my chances of a home loan?

I have had a very fruitful personal-banking relationship on other credit-products with other banks (ICICI /HDFC) for over 10 years. So is there a change they will take an exception to CIBIL report if i try to explain the discrepancy?

Are there any RBI regulations/ guidelines preventing scheduled banks from approving home loans to CIBIL defaulters?

4 replies on this article “Is CIBIL report really a constriant in receiving home loans?”

  1. rmohan80@gmail.com says:

    Hi,

    Let me give you a different view point. How much is the excess amount that is due? Also, can you point the link to the other thread here?

    Even if it’s a bad charge that can be reversed, maybe you can go ahead and pay it now while you follow up with the bank?

  2. Dear Piku, from your query, it seems your CIBIL report ‘ll have a push up & pull down effect. The S&C CC issue ‘ll pull down your Credit score where as your existing credit facilities with ICICI & HDFC banks ‘ll push up your credit score. I’m agree with dear Manish here that it’s wise to pay that amount & make your history clean & then only to fight it out.

    thanks

    Ashal

  3. BanyanFA says:

    Completely agree with Manish. Bank get valuable insight on the credit patterns / usage of a loan borrower via a Credit Report. This is a standard practise over all developed countries. CIBIL reports were being used in India for past 10 years and its usage is now picking more speed.

    One thing which I can mention is that you can challenge an entry in your CIBIL report, but for that you would need to contact the bank / company which has put this entry in your CIBIL report. CIBIL won’t remove this entry based upon your request. You need to file a formal complaint with the respective Credit Card company explaining them the reason why there is an error and that they need to fix / reverse the CIBIL item.

    Regards
    BFA

  4. There is no RBI guidelines on this, but from last 2-3 yrs , Banks have started looking at Credit scores and credit reports (CIBIL is just one of them) in India. It was bound to happen as this is standard way it works all over the world . US has FICO score just like CIBIL in India .

    Now , coming to your case, there are higher chances that the charges put in your case is as per terms and conditions and mostly you are not aware about it or never read the fine prints (that does not mean, you are at fault, I am just saying what I feel so) .

    Now if things are not paid on time , the bank will definately update this to CIBIL, they anyways to it each month. This single thing alone does not take your score down, but it will hurt it .

    Now, the first thing you should do is check your CIBIL score, apply it online and it comes to you in 2-3 days in email. Your score has to be above 750 , to call is “good” . in 2011 more than 88% loans were approves to those who had score of above 750 . 800+ would really be very good.

    So if its a small amount to pay, my very honest suggestion would be to just pay it off and from next time make sure things dont happen at all , but if its a big amount, its your decision how you want to move from here.

    Let me know if you need any more guidance on this . You should read these two articles which I am giving

    https://www.jagoinvestor.com/2011/07/cibil-report.html
    https://www.jagoinvestor.com/2012/01/cibil-credit-report-mistakes-correction-steps.html
    https://www.jagoinvestor.com/2011/12/get-cibil-score-online.html

    Manish

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