How To Check CIBIL Defaulter List?

Credit information companies including CIBIL maintain data on defaulters of Rs 1 crore and above and wilful defaulters of Rs 25 lakhs and above based on the information shared by banks and financial institutions.

The Reserve Bank of India has mandated banks and financial institutions to share list of defaulters of Rs 1 crore and above and wilful defaulters of Rs 25 lakhs and above on a regular basis with credit information companies including CIBIL.

The data on these defaulters can be accessed from CIBIL website (https://suit.cibil.com/) if the bank or the financial institution has filed a lawsuit against the defaulter in a court. However, in the case of default accounts of above Rs 1 crore and above (Rs 25 lakhs for willful defaulters) where no lawsuit is filed, the defaulter list is provided to only to banks and financial institutions through a password-protected website.

Even though there is no specific CIBIL defaulters list, if you have defaulted on your loan or credit card in the past, it will get reflected in your CIBIL Score and CIBIL Report.

So, if a bank or a non-banking finance company rejects a loan application, it is not because the applicant's name is on CIBIL defaulter list but it is because his or her credit score is low.

Banks and NBFCs use credit scores by credit agencies like CIBIL to assess the creditworthiness of borrowers. The higher the CIBIL score, the better the chance of getting loans at attractive rates.

Credit score is a metric used to rate a borrower’s creditworthiness. It factors in a borrower's payment history, credit utilisation and credit mix.

The CIBIL Score range from 300 and 900 with 900 being the highest possible score. Any score above 700 is generally considered good and credit worthy.

How To Maintain A Good Credit Score?

One can improve the CIBIL Score by maintaining a good credit history, which is essential for loan approvals by lenders.

The important steps to follow are:

Timely Payment:

Late payments are viewed negatively and can adversely affect your score.

Credit Limit:

Use credit prudently and must use credit limit provided by lenders judiciously. An increase in credit card balance or increase in credit utilisation means higher repayment burden, which may negatively affect your score.

Credit Mix:

It is better to have a healthy mix of secured loan like home loan and unsecured loans such as personal loan and credit cards. Too much dependence on unsecured loans will reduce your score.

Multiple Loans:

Avoid multiple loans. If someone makes multiple loan applications, it will be seen as the person is seeking excessive credit.

Guarantees:

You may be prudent on repaying your loans, but your credit score can still go down if you have stood guarantee for a loan and the borrower has delayed payment. If you have co-signed or stood guarantee for a loan, you are equally liable for the defaulter as the borrower is.

Monitor Score:

One must regularly monitor ones CIBIL Score to avoid unpleasant surprises. CIBIL website and many NBFCs allow you to check your credit score free provided you give some basic information. RBI has mandated all credit information companies including CIBIL to provide one free full credit report and credit score to individuals once a year.

How To Remove Your Name From Defaulter List?

If a borrower has defaulted on a loan, he can get the name removed from the defaulter list either by repaying the loan or through a one-time-settlement or out of court settlement, if the case has already been filed in a court. Once the account is settled, the bank will remove the name from defaulter list.

However, if the borrower has taken concessions while settling it, the account will reflect in CIBIL report as "settled". A "settled" status means you have settled the account with the lender but has not repaid the full amount. It will have a negative implication for your credit score and your prospects for taking loans in future. The settled status on a loan will remain in the record for seven years. If the loan the borrower fails to repay or settle a loan, the lender will be shown as "written off". Just like a "settled" loan, a "written-off" loan can also have negative implications for the borrower's CIBIL Score and his or her ability to take loans in the future.

Conclusion

Credit scores are crucial for lenders like IIFL Finance for assessing personal and business loan applications. IIFL Finance provides business and personal loans through an online application process that reduces the turnaround time. The company offers unsecured business loans of up to Rs 30 lakhs and personal loans of up to Rs 5 lakhs at competitive interest rates.