Even Standard Assets can worsen your CIBIL Score!

Every day I am visited by bank borrowers complaining that their CIBIL Score has gown down even when none of their loan accounts is marked as Non-Performing Asset (NPA) by their Bank and all their Loan accounts are Standard shown as STD in the CIBIL Report. I tell them on their face that even Standard Assets can also worsen their CIBIL Scores! Sounds Strange? But it is true that Standard Assets can also worsen your CIBIL Score!

Usually, the Banks mark the loan accounts as NPA (Non-Performing Asset) after the borrowers enjoy the privilege of keeping their loan accounts as Standard Assets for a period of three months at stretch. To understand the underlying principle of downgrading CIBIL Scores even when the loan account is a Standard Asset we must know the exact definition of a Standard Assets and Fractured Assets liked Sub Standard, Doubtful and/or Loss Assets.

As per RBI Guidelines in force:

Standard Assets are accounts which are overdue for less than 90 days. Banks do not mark any loan account as NPA till the borrowers breach the overdue period of 90 days. The public, in General,  is under a misconception that their Loan Account cannot downgrade their CIBIL Scores till it is a Standard Asset. But it is not so as Banks records even small defaults of even a single day and every day of default is counted in the number of days for reporting the loan account as Past Due in CIBIL Report. To understand the concept of Past Due, we need to understand the concept of DPD in CIBIL or Credit Reports.

What is DPD in CIBIL Reports?: DPD stands for Days Past Due which is number of Days that have passed from the agreed repayment due date of EMI.

DPD of ‘0 zero’ indicates that the Payment is made as agreed and the credit/loan account is up to date without any default. The account is termed as a Regular Standard Asset, the best possible asset classification as per RBI Guidelines.

DPD of ‘>0 >zero’ equal to or less than 90 days indicates that the loan account is “Days Past Due” by such number of days as reported by the respective lenders to the Credit Bureaus. Such accounts are termed as Irregular Standard Assets, adversely affecting the CIBIL Scores to the extent of Number of Days for which the account is Past Due. Scores go on reducing with every day of default or increase in the number of days for which the loan is Past Due.

DPD can be any number from “0” to “90” or even more than that if the lending Banker does not mark the loan account as NPA to keep its Balance Sheet in good health.

Sometimes after the Bank or Lending Institution either decides to mark the account as NPA or actually classifies the loan account as NPA, the borrowers rush to clear the overdue and get the loan account marked as Standard Asset again. But the prudent bankers keep such accounts under their close supervision by marking such accounts as SMA or SPECIAL MENTION ACCOUNTS. Broadly speaking accounts with SMA status are those Standard Asset Accounts in which the lending institution would like to monitor the account closely for one of some other discrepancies.

We will be discussing about SS (Sub Standard), DBT (Doubtful) and LSS (Loss) assets in our next post. Please keep visiting us for your CIBIL Problem.


Can Anybody else lower your Credit Rating and Score?

Can Anybody else lower your Credit Rating and Score?

If somebody asks you this question your abrupt reply will be “How can somebody else lower my Credit Rating or Score!”. But hold your breath. It is possible that despite the fact that you have never defaulted in payment of bank loans or in making timely payments of your credit card bills, your poor credit score or rating may surprise you and your bankers. I am receiving numerous complaints against CIBIL and other credit rating agencies. When I thoroughly investigated their CIBIL reports, it was found that somebody else was responsible for lowering their credit score and they were ignorant about the real culprits who were spoiling their credit reputation worldwide. 

How to find and locate such Culprits?

Such culprits are none other than your close relatives, friends and even family members who might have used your good credit reputation to cheat the lending institutions. To find and locate such culprits just you need to critically examine your own Credit Report and in the reported accounts just look for those accounts where ownership type is either Joint or Guarantor.

Use the “Know your Lender Name and Loan Account Number” to get the loan account details of those accounts where your ownership is shown as Joint or Guarantor. Once you have access to the loan account number and the name of the lending banker, approach the lending banker to provide the details of the account by showing your Credit Report. The lending banker will provide you with the following information:

  • Either you are a co-borrower in the loan account
  • Or loan has been granted at your specific Guarantee Bond

In both the situations i.e. as co-borrower or guarantor you have full right to obtain the following documents from the lending banker:

  • Statement of Account in default.
  • Check the Loan Agreements that you have actually signed the loan agreements as co-borrower.
  • Check the Guarantee Bond executed by you if the lending banker informs you that you have stood as Guarantor in the loan account reported in CIBIL report.
  • In case the Bank is not able to produce either loan agreement or guarantee bond than do not forget to obtain written undertaking from the Bank officials that you are nothing to do with the said loan account.

Try to recollect the names of the loan account holders, who will definitely be either your close relatives or friends and even family members who might have used your good credit reputation to cheat the lending institutions. At the time of obtaining the loan or credit facilities they might have requested you many times and now it is your turn to request such close relatives, friends and even family members to regularise or close their loan accounts. It will take more than 60 days time even after regularisation and closure of such accounts that such accounts are taken off your Credit Report. In future, think 101 times to become co-borrower or Guarantor of such persons who might spoil your credit reputation and you may get debarred from taking any loan or credit card from lending institutions.

In addition to the above culprits who can lower your credit score without your knowledge, your can also be a victim of recycled or reissued mobile numbers. If you have got issue a brand new SIM from your mobile service provider and you are receiving unnecessary SMSes purportedly meant for the user who might have used this mobile number earlier then you can land yourself in a big problem. While getting issued the fresh SIM and Mobile Number ask your service provider to given and undertaking that it is not a recycled or reissued mobile number.

Last word of caution! Get such loan accounts fully adjusted and closed without any waiver from the lending institution as in case there is any waiver the status of the account will become “Settled Account” and the account will remain forever on your Credit Report. It is a very cumbersome procedure to approach the bank again for depositing the waiver amount as the bankers get the waived amount deposited immediately but never update the status of the account with CIBIL due to technical reasons.

Still struggling with your CIBIL Credit Report? Meet our CIBIL Consultant to get rid of any CIBIL related issue.

Settle Bank Loans with or without CIBIL Clearance


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If you are not a will full defaulter of Bank Loans and you have genuine reasons for not repaying the bank loans in due course of business then major banks have humanitarian credit policies to go in for OTS or Settlement. All the major banks in India have their own pre-defined policies for settlement of Overdue, Past-Due, Substandard, Doubtful or Loss Assets.

Settlement without CIBIL Clearance:

In such cases, the banks waive some charges and interest from the date the loan account was classified as Non-Performing Asset. But such settlements come with a rider attached to it. The concerned Bank will report the account Status as “Settled” to CIBIL and other Credit Rating Agencies like Equifax, Experian, and HighRank and it will get reflected in the future CIBIL Reports resulting into the rejection of your Loan application. In such case, you will have to again approach the concerned bank for CIBIL clearance and it is a very cumbersome procedure. Anyhow if you have any “Settled” or “Written Off” accounts in your CIBIL report, you can consult the CIBIL Consultants personally or online.

Settlement with CIBIL Clearance:

While settling the Loan accounts with Banks, the borrowers should prefer the Settlement with CIBIL Clearance if there is only meager or marginal difference in the amount Offer of Settlement. However, in case the borrower can not afford the Settlement Amount at once, then he can go in for a lesser amount of settlement without CIBIL clearance. The borrower is at liberty to contact the Bank for additional payment to seek the CIBIL clearance. The only difference is that till the CIBIL Clearance, No financial institution will grant a fresh loan to such borrowers. It takes months to improve the Credit Score even after CIBIL clearance.

Note: CIBIL Consultants are always available to handle your loan account to be settled with or without CIBIL clearance. No need to visit the Bank and expert CIBIL Consultants will help you to clear your dues through dignified offers.