‘Written Off’ means the lender has failed to recover the outstanding dues from a borrower after a certain point of time. The lender would report to CIBIL as written off. However, the status can be changed to ‘Closed’ on paying the dues in full. However, if you can’t pay in full, you can use the debt settlement option to get rid of the written off tag.
The debt settlement is an agreement between the lender and borrower to make it easy for the latter to pay off the dues. The lender can agree to reduce the debt by giving you a concession on the interest payable. As soon as you repay the agreed amount, the lender would state as ‘Settled’ in its monthly report to CIBIL. The settled status would improve your CIBIL record affected by the written off tag.
Post the debt settlement, the lender may be hesitant offering you an unsecured loan or credit card as you did not pay the previous dues in full. You can, though, apply for a secured loan against securities such as fixed deposits, National Savings Certificate (NSC), etc. The loan amount can be equivalent to 80%-90% of the collateral value. On the other side, a few banks issue credit cards against the fixed deposit. The credit limit of these cards constitutes around 80%-90% of the fixed deposit value.
Secured credits can raise the CIBIL score faster than usual on maintaining a timely payment routine. Other benefits include lower interest rates, hassle-free approval, no requirement to submit income proofs, etc.