How to Remove a Written-off Account from Your CIBIL Report

CIBIL (Credit Information Bureau India Limited) is one of the leading credit information companies in India, providing crucial credit information to financial institutions. A written-off account in your CIBIL report can significantly impact your credit score and overall financial health. While it is challenging to remove a legitimate written-off account, there are several steps you can take to improve your credit standing. Let’s explore the process in detail.

Step 1: Check Your CIBIL Report

First, obtain a copy of your CIBIL report to verify the details of the written-off account. Carefully review the report for any discrepancies. Common issues include incorrect amounts, incorrect dates, or even fraudulent entries. If you find any inaccuracies, you should take action to address them immediately.

Step 2: Resolve Outstanding Debts

One of the most effective ways to remove a written-off account is by resolving the outstanding debt. Contact your lender to discuss settlement options or a repayment plan. Negotiating a lower repayment amount or extending the payment period can be beneficial. The sooner you clear the debt, the faster your credit score can improve.

Step 3: Request a Correction

If you believe the written-off status is incorrect, file a dispute with CIBIL. Gather all necessary documentation, such as proof of payment, communication records, and any relevant correspondence with the lender. Submit your dispute through CIBIL’s official platform, providing detailed information and relevant evidence. CIBIL will investigate your claim and, if valid, may correct the report.

Step 4: Wait for the Appropriate Time Period

Written-off accounts typically remain on your credit report for up to 7 years. During this period, your credit score will continue to be negatively affected. However, after the 7-year period, the account should be automatically removed from your report. This is a natural process that does not require additional action on your part.

Step 5: Build Positive Credit History

To improve your overall creditworthiness, focus on good financial habits. Pay your current bills on time, maintain a low credit utilization ratio, and responsibly obtain new credit. Utilizing credit wisely over time can lead to a better credit score and financial stability.

Special Cases: PSU Banks and One-Time Settlement (OTS) Scheme

In some cases, particularly with Public Sector Undertaking (PSU) banks, the loan status may remain 'Written-off' even after settling the account through an OTS scheme. To rectify this, you must clear the remaining outstanding amount by paying directly to the lender. Seek assistance from the loan-availing branch and the branch manager to understand the specific steps required. After settling the account, raise an online dispute with CIBIL along with the payment receipt and full and final no dues certificate. This action will help to update your CIBIL report.

Conclusion

While removing a legitimate written-off account from your CIBIL report is not easy, there are several steps you can take to improve your credit standing. Taking proactive steps, such as resolving outstanding debts, requesting corrections, or settling accounts through an OTS scheme, can help you maintain a positive credit history over time. If you are unsure about the steps to follow, consulting a credit counselor can provide personalized advice tailored to your specific situation.