How to Remove Settlement Status from CIBIL Report and Improve Your Loan Eligibility
Have you ever closed a loan by paying a discounted amount?
Because of this, your settled status is showing in your CIBIL report, and due to this reason, you are not getting any loan from banks.
About 8–10 years ago, even after having a settlement status, getting a loan was not as difficult as it is today. Even now, after a settlement status, home loans and mortgage loans are available. Personal loans are also available from non-banking finance companies, but there the rate of interest is very high and the terms and conditions are very poor. Once you take a loan from such lenders, it becomes very difficult to exit, and you may fall into a loan trap.
If you want to take a loan from a good and popular bank where the rate of interest is low and the terms and conditions are flexible, then you will have to remove the settlement status from your CIBIL report. How you can remove the settlement status will be explained in detail. At the end, the step-by-step process of how to raise a dispute in CIBIL to remove the settlement status will also be explained.
Before filing a complaint in CIBIL to remove the settlement status from your CIBIL report, you must keep some important points in mind.
What Does Settlement Mean in a CIBIL Report?
- Mutual agreement between the lender and the borrower.
- The bank offers the borrower to pay a discounted amount.
- It is also known as One Time Settlement (OTS).
How Does Loan Settlement Affect Your CIBIL Score?
- The loan status is mentioned as “Settled / Post (WO) Settled” in your CIBIL report.
- This is considered a negative remark and affects your CIBIL score.
- It reduces the possibility of getting approval for a new loan or credit card.
What Is the Difference Between Settlement & Post (W/O) Settled?
- Loan settlement refers to a mutual agreement between the lender and the borrower.
- Post (W/O) Settled means when you settle the loan after it has been written off.
Myth About the Settlement Record in CIBIL Report
- Is there any possibility to remove settlement from CIBIL automatically after 7 years?
- In India, if you settled any of your prior loan accounts, the “settled” remark will remain in your credit report for a lifetime.
- In the USA, credit bureaus may remove borrower records from their credit report after 7 years.
Process to Remove the Settlement From CIBIL Report
- If the default loan is unknown to you.
- If you genuinely settled one of your prior loan accounts.
- If the settlement status is showing due to an error.
Steps to Be Taken
- Contact the lender.
- Pay the remaining (outstanding) balance and collect the NOC
- Private sector bank or NBFC
- Public Sector Undertaking (PSU) bank
- Raise a dispute in CIBIL
- Dispute through online
- Dispute through written complaint
- Send a request to the lender for the required correction.
Three Scenarios for Settlement Removal
- Data mixing
- Clerical error
- Genuine compromise settlement
In the first two cases, the settlement status can be easily removed through an online dispute. In the third case, you must contact the bank, pay the remaining outstanding amount, collect the NOC, and then raise a dispute in CIBIL.
While making the payment, always collect the money receipt and obtain a new No Due Certificate that clearly mentions “Standard Close.”
Raising a Dispute in CIBIL
After that, raise a dispute in CIBIL through online or written complaint. A written complaint is more powerful because you can explain the issue in detail and attach supporting documents.
You need to visit the official CIBIL website and follow:
Support → Write to Us → Dispute → Account Section
Fill in the form and write a detailed complaint letter. The CIBIL Control Number must be mentioned. Attach the CIBIL report, money receipt, and No Due Certificate.
The complaint is resolved within 45 days.
Conclusion
By now, it must be completely clear how to remove the settlement status from your CIBIL report. If you find it difficult to do it yourself, you can contact us. My team will help you with CIBIL report rectification and improve your score so that you can easily get a loan.