- Ever wondered about your loan history and what does it include?
- Read this post that tells the same as well as suggests some credit remedies
No, you can’t hide your loan history in your CIBIL report! Doesn’t matter whether the loan history remains good or bad, the lender can access the same when you apply for a fresh loan. So, instead of thinking about hiding your loan history, you should focus on what the history is made of. Knowing the same will help you strategize your credit activities better and enjoy a seamless loan and credit card approval later. In this post, we will tell you the constituents of loan history that you can see in your CIBIL report. Let’s begin!
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Check Your CIBIL Report to Know the History
Login to CIBIL report to check the loan history, which shows the details of repayment – the date of payment, different credit accounts if you have taken more than one debt, the loan amount taken, instances of late or skipped payments, credit enquiries, etc. Let’s discuss each of these.
Dates of Loan/Credit Card Payments
The history will show the dates on which you have made loan payments. The lender will report this to CIBIL, one of the renowned credit bureaus in India, after 30 days of making the payment. The fresh score will be updated in CIBIL report in another 30-45 days from there. So even if you are late by a day or two, it will not affect your credit score. But you should make it a point to pay your loan dues on time. It’s a good habit and will ensure a healthy CIBIL score.
Number of Credit Accounts
The loan history will also include different credit accounts – personal loans/home loans/car loans or any other loans. Even a credit card account will be shown in your loan history prepared by CIBIL. Apart from these, you could also see the amount of loan taken against each of the credit accounts. In the case of credit cards, CIBIL will look at your credit utilization ratio closely. As a credit guide, we will advise you to keep your utilization to below 30% of the credit limit offered. A greater ratio gives credit bureaus like CIBIL a credit-hungry impression of yours. As a result, the CIBIL score could come down.
So, if your credit card limit is INR 70,000, don’t spend more than INR 21,000 a month. But fixing the spending limit will also depend on your monthly income. In case your monthly income is INR 40,000, spending INR 21,000 on a credit card could be too much. It may not be a thumb rule, but keeping the credit card spending limit to 10-15% of your net monthly income will help ensure timely payments, which would go on to boost your CIBIL score.
Instances of Late and Skipped Payments
Loan payments made after 30 days of the scheduled date will decrease your credit score. Not only that, you will also have to pay a late payment charge. It’s a total loss for you! On the other hand, if there are skipped payments and that too for quite long, it will reflect very poorly in your CIBIL report. Given the consequences of both late and skipped payments, you will be better off managing your routine efficiently to pay all your dues on time.
Spots of Debt Settlement
If you have made a debt settlement, which means paying an agreed but reduced amount to the lender to get rid of loan obligations, you must have realized the mistake by now. Most likely, lenders would have denied you unsecured credits such as personal loans. The reason being the recording of debt settlement in your CIBIL report. It gives lenders the impression of your poor debt management skills. But the world doesn’t end for you!
You can get your credit record better by paying off the remaining due amount or taking a secured credit card, which you could get against your fixed deposit. Yes, you are allowed to pay off the remaining dues even after the debt settlement agreement. Doing the same will make the lender change your credit status from ‘Debt Settled’ to ‘Debt Fully Paid’. It will report the same thing to CIBIL, and as a result, you could become eligible for all the loans.
But if you can’t pay the remaining due, opt for a secured credit card and improve your credit score fast by paying the bill on time and maintaining the same.
Before applying for a loan or credit card, you could make credit enquiries to see what’s your credit score. Ideally, a credit score should be above 750 to get a hassle-free approval for loans and credit cards. But even individuals having a score of 700-750 can be considered creditworthy. Once you apply, the lender will do a credit enquiry too. It will be a hard enquiry and can decrease your credit score if the application gets rejected. Hard enquiries stay in your credit report for around 2 years from the point of instance.
The CIBIL report will also include personal details such as your name, PAN number, residence address, email address, contact number, etc. Many times due to human error, your CIBIL report may show the loan as running even if you have closed it. Due to incorrect input of data, this can happen. If it happens in your case, you can raise the dispute with CIBIL. Log in to CIBIL and go to dispute resolution and select the item you would want to dispute. The credit bureau will resolve your dispute within 30 days.
Now that you know the elements of your credit history, you could make strong credit moves to fulfill your needs and also let your credit record notch higher with time. In case you have gone wrongly in your credit life, there’s always a way out as suggested in this post. Implement the right credit steps at the right time to achieve the right result.