How to Change the Written Off Status & Clean CIBIL Record?

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You may not be familiar with the term ‘Written Off’ as that’s very typical in itself with its own technicalities. However, you won’t do yourself any favour by continuing to be unfamiliar with the term, particularly if you have had an experience of handling any credit in your lifetime. Yes, the written off term is applicable to loans and credit cards that one gets from banks and non-banking finance companies (NBFCs).

The term actually means that the lender could not recover the outstanding dues from you despite repeated attempts. The lender would then submit the report to credit bureaus, such as CIBIL, as written off against your credit account. It’s a tag that can lead to legal complications as you still owe to the lender. Your credit score also falls to remarkably low with the same.

More worse is that your CIBIL record gets tainted and puts you among the list of defaulters, almost shutting the door for any credit you may look for in times to come. However, you can get the tag changed and your name removed from the defaulter list following the recommendations highlighted in this post.

Check for Possible Errors in CIBIL Report

Mistakes are humane and can make you a victim for no fault of yours. You can check the CIBIL report to see the account on which the written off tag is assigned. See first whether it’s your account or not. Also, there can be errors in name or the status of the account. You may have closed the account but the report would read it as Written Off. This can happen with CIBIL possibly failing to update the latest status. Don’t waste anytime, dispute the errors, if remains on the report, on the online platform of CIBIL, which would take a month or so to change the status from written off to closed.

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Settle the Due ASAP to Get the Written Off Status Removed from Your CIBIL Record

If the written off status is true with you failing to clear the dues, it’s high time you contact the lender and look for a settlement deal. The lender can ask for the reasons that stopped you from repaying the debt. The reasons must sound logical and be evidenced with to create an impression that you are not a wilful defaulter.

On the other hand, the settlement amount and process would also depend on the type of credit being availed. Loans usually come at an interest rate of 11%-25% lower than 30%-45% charged on credit cards. Most probably, the lender won’t give you any leeway in terms of principal repayment. However, the interest liability can be reduced by virtue of the settlement agreement.

How to Settle the Dues as Agreed and Clean Your CIBIL Record?

You must have agreed on the sum to be paid to the lender over a specific period of time while signing the settlement deal. Most likely, the agreed amount would be far lower than the original outstanding dues. However, you must ensure discipline in your spending routine to save enough to repay the settled debt on time. The general advice would be to cut down the monthly spends by a few percentages till the time the debt is paid off, if not forever. As soon as you repay the whole agreed amount, the lender will report the same to CIBIL as settled, marking a much-needed change in the credit status from written off.

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Shall You Glance at the Parameters That Make Up Your CIBIL Score Post Settlement?

The answer is Yes as the settlement may possibly chuck some points off your CIBIL score, which typically ranges from 300-900 in India. The parameters that CIBIL uses to assign scores would thus be pivotal to you in rebuilding your credit history the most desired way. Here’s a list of parameters based on which CIBIL generates the credit score.

Credit AspectsWeightage
Repayment history35%
Amount owed by borrowers30%
Number of years servicing the debt15%
Number and amount of recent loans availed or applied for10%
Credit mix10%

Personal Loan Interest Rates March 2019
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.50%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank12.00% - 17.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates March 2019
State Bank of India/SBI8.70% - 9.35%
HDFC8.80% - 9.55%
Bank of Baroda8.65% - 9.65%
LIC Housing8.95% - 9.15%
PNB Housing Finance9.00% - 13.00%
ICICI Bank9.10% - 9.30%
Axis Bank8.85% - 9.10%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%