Thursday, 8 December 2016

Ways to Remove your Name from Defaulters' List

Priya applied for a home loan. After completing all the documentation meticulously and submitting it to the bank she was feeling happy at the prospect of getting he own house. However her happiness was short lived as her loan application was rejected.  On contacting the bank she discovered that her application was rejected because of a low credit score. Her credit rating was low because of her credit card payments default a couple of months back (her credit card had been stolen). Whatever the reason might have been she was on a default list which made her a risky customer.
I am sure none of you intend to be in a position like Priya but some may find themselves on a loan defaulter list due to one reason or another. Here it is important to mention that no credit agency maintains any defaulters list. Credit rating agencies just collect and analyze data that is provided to them by all lenders about various individuals. Being on a defaulters list means that there has been some default in the credit history due to which the lenders may be hesitant to lend you.
How to Remove Your Name from Defaulters List?
If for some reason your name is on a defaulters list you need to act fast and get it removed from there as soon as possible. Getting loans with bad credit can be difficult just like for Priya; apart from that it is important to maintain a good credit health for being overall financially stable. Below we discuss ways that can help you getting your name removed from a defaulters list.
·         Check Your Report: The first thing obviously is to access your Credit Information Report to find out if you are or can be on defaulters list. It is not a good idea to be only reactive and act only when you come to know that there is problem as by that time it is too late to do something immediately which means that by then your loan application would already have been rejected. It is better to be preemptive and keep checking your score that you can take action when required.
·         Identify the Cause: After you access your CIR the next thing is to identify the problem that has caused you to be on the defaulters list. There can be multiple reasons for this. Sometimes the problem may be genuine while sometimes it could be due to an error. Thus there can be three broad reasons for a name appearing; the first is there is an error because of inaccuracy of personal details or some other person’s details entered in your report. The second reason is an erroneous reporting by a lender and the third obviously when you have actually defaulted.
·         Contact the Rating Agency: In the first scenario where the problem is due to some inaccurate details, sorting the problem can be fairly simply. If some other individual’s loan default is reported in your CIR or you have accessed a wrong report due to entering a wrong name or PAN details then let the credit agency know and they will rectify the problem. If the problem is because of wrong data sent by a lender then the rating agency cannot do anything at their end. They will contact the concerned lender and ask them to look into the matter. No rating agency can make any changes at their end without getting the requisite details from the concerned lender. Then we come to the third cause; an actual default. This is something which will require effort and working upon by you. You need to contact the lender and work out a solution. Most lenders are willing to negotiate as long as you are reasonable. If there are unpaid installments pay them at the earliest; though there is bound to be some negative impact on the rating but the future negative reporting will cease.
·         Follow Up: Once you have taken the requisite action that is either contacting the rating agency or talking to the lender you need to follow up. If the rating agency contacts the lender there will be some time lag before the necessary changes are made in the CIR. Similarly of you pay your dues then the change will reflect only in the next reporting by the lender to rating agency. So you need to follow up to check if the desired change has been made in your score. If not then you need to find out why and then take action accordingly. There is no need to take a full CIR but you could just access the free credit score; this will let you know if any change has occurred in the score.
So if for some reason you find yourself denied a loan because you are on a defaulters list then the above information can help you deal with situation.

1 comment:

  1. Hello Everybody,
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