Will it Help Raise My CIBIL Score If I Pay the Written-off Amount?

Last Updated : Jan. 21, 2025, 6:09 p.m.

Written Off on a CIBIL report means that the lender could not recover the loan amount from the borrower in spite of taking a lot of effort. The written off status impacts your CIBIL score negatively, and it can be challenging to remove it from your CIBIL report. However, you can pay off the written amount and then remove the written off status from your CIBIL report. You can also rebuild your credit score. Let us now understand the status “Written off” in more detail and its impact on the CIBIL score Let us also read on to find out how to remove the written off status and rebuild your CIBIL score.

Written Off

If the banks cannot retrieve the dues, then it is reported as written off (WO). When there is a default, banks always try to recover the dues from the borrower. The written off status is broken into 2 parts as follows:

• Written off (Total) - The 100% amount is written off including principal and interest
• Written-off (Principal) - The total principal amount written off is reported.

The reason for reporting these 2 sections is to find out the written-off interest.

What is the Impact of Written-Off on the CIBIL Score?

The status “Written off” in a person’s credit report reflects negatively on his financial status. The person will find it extremely difficult to get loans. Most lenders will not want to provide loans or credit cards to people who have not paid their dues on previously existing loans or credit cards . The credit score will reduce drastically.

Example:

If you have a credit card balance of Rs. 50,000 and the lender writes off Rs. 22,000 of the principal, then the written off interest is Rs. 28,000. In such cases, your credit score may fall drastically from 800 to 680 CIBIL points if there is a written off (Principal) and it may come down to 550 CIBIL points if it is a Written off (Total).

Tips to Remove a Written off Status From your CIBIL Report

It is always ideal to review your CIBIL report regularly to check if there are any discrepancies. If there are, you can raise a dispute with CIBIL and clear the error. Mistakes can often lead to a “written off” status, and closed accounts may be erroneously marked as “written off”. Once you have checked and affirmed that there are no errors, then you must contact your lender to start deleting the “written off” status, since CIBIL cannot make the removal independently. You can then take the following steps to remove the “written off” status on the CIBIL report.

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Tip1 : Contact the Lender

First, contact the lender from whom you took the loan. Get the details of the exact amount that you have to repay them.

Tip 2: Chalk Out and Negotiate a Plan for Repayment

After you have figured out how much you have to repay, draw out a plan for repaying the outstanding amount. You can chalk out a repayment plan that is suitable to you and the lender. Ensure to settle the total amount.

Tip 3: Get a “No Dues Certificate”

After you have settled your loan in full, get a “No Dues Certificate” from the lender. This is a document showing that all the dues have been cleared.

Tip 4: Intimate the Credit Bureau

The lender must inform the credit bureau about the new loan status.

Tip 5: Raise a Dispute the Credit Bureau

If the lender does not update the credit bureau or if he delays in deleting the written off status or giving the No Dues Certificate, then you can directly contact the lender and raise a dispute with the credit bureau.

Tip 6: Furnish the Necessary Documents and Follow Up

When you raise a dispute, show all the supporting documents such as the “No Dues Certificate”. Continue to follow up with the bureau until the written-off status is deleted from your CIBIL report.

How Can You Prevent a CIBIL Status of “Written Off”?

Getting a written off deleted from your CIBIL report can be a long and tough process .Rebuilding your CIBIL score is also challenging. So, to prevent all these, take steps to avoid the written off status. Here are some steps you can take to do it.

• Evaluate how much you can pay as EMI or for credit card bills every month before applying for lenders.
• Research various credit options and decide on the one that suits your needs the most.
• It is easier to apply for and repay loans that have low interest rates and longer repayment periods.
• After applying, read the loan agreement in detail. Review every aspect. This will help you to identify errors, clarify doubts, or come to know of any hidden charges or fees.
• Create a budget every month for your expenditures and try not to spend more than that.
• If you feel that you are going to default on your loan, then let your lender know as soon as possible. This will also help you to find a solution that is beneficial to you and the lender.

How Can You Re-build your CIBIL Score?

You can rebuild your CIBIL score after removing the written off status. The factors impacting your CIBIL score include repayment history, credit utilization ratio, the number of loans availed, amount to be repaid, and the age of credit. Here are some steps you can take to rebuild your CIBIL score.

• Make regular payments of your credit card and that too in full.
• Take and pay back small loans completely.
• Ensure that your CUR is low, within 30% to 40%

How Much Will It Take for the CIBIL Score to Improve?

It’s hard to predict the exact time for the improvement in the CIBIL score. Check what your credit score is after the loan or credit card, whichever you have, has got written off. In case it is 200 or more points away from touching 700, which is considered a good credit score, you may take a couple of years to touch the landmark figure provided you maintain a spotless payment record with no delay.

How Will Your CIBIL Score Change as You Begin to Pay Off the Written-off Debt?

Like we said earlier that the improvement in the CIBIL score will correspond to the installment payment you make. The lender will report to CIBIL after 30 days of making the payment. CIBIL will then take a month or so to update the latest credit score. It might not increase your score fast given that you are paying the debt, which has got written off. So, you will need to be patient and keep up the good work of paying the dues on time. It will reward you by taking your score to 700 and above gradually. CIBIL score generally ranges from 300 to 900 in India and is given based on the repayment track of individuals.

Shall You Check the Credit Score After Making Each Payment of the Written-off Amount?

As told before, the score would improve gradually. So, checking the credit score after making each loan or credit card payment may not be advisable. Plus, CIBIL takes about 2 months from your payment date to update the latest credit score. But checking the CIBIL score in a gap of 6 months can still be recommended. Hopefully, the score would rise by some points over such a gap.

What Should You Do After You Finish the Payment of Written-off Amount in Installments?

After paying the last installment of the written-off amount, you need to request the lender to get the written-off label removed against your credit account. The lender will change the status to ‘Debt Fully Paid’ from Written-off in its report to CIBIL. A couple of months later, CIBIL will update the status as well as the score, which will most likely be 700 and above.

How to Check the Debt Fully Paid Status in CIBIL Report?

You can check the same on the official website of CIBIL by creating an account. CIBIL will ask you to mention a few details for the account creation. Once the account is created, you can check the ‘Debt Fully Paid’ status. You also have one more option i.e. Wishfin, an official partner of CIBIL where you can check the credit score and latest credit status for free. Here’s how you can do so at Wishfin.

• Visit Wishfin.com
• Go to ‘CIBIL Score’
• If you already have an account, you can click on ‘ LOGIN ’ to see your detailed credit report

If you do not have an account, you need to create one by mentioning the following details –

• Name
• Date of Birth
• PAN Number
• Contact details such as the mobile number and email address
• Tick on the checkbox of terms and conditions and click on ‘Submit’

This way, you can get the account created. Afterward, click on ‘LOGIN’ to check your credit report, wherein you can see the credit score as well as the latest credit status.