A healthy CIBIL report and score increases one's chances of getting a loan. Research data based on CIBIL (Credit Information Bureau (India) Limited) data analysis indicates that 79% of loans and credit cards were approved for individuals who had a credit score of 750 and above. The first step towards developing a healthy CIBIL report is to understand its contents. One of the most important elements of the credit report is the Accounts section. This section contains the details of all the loans and credit cards you have availed including name of lenders, type of credit facilities (home, auto, personal, overdraft, etc.), account numbers, ownership details, date opened, date of last payment, loan amount, current balance and a month on month record (of up to 3 years) of your payments. This section also provides Status on the account, which defines the health of the account. Explained here are some common status flags that can occur on an individual's credit report and what they mean: Closed: If you find a date adjacent to the Closed field in your account section, this means that that loan account has been closed by the lender. In other words, it means you have paid off your loan in full and the bank has reported this account as Closed to CIBIL. After closing a loan it is important to obtain a No Dues Certificate (NDC) from the lender, banks issue a No Due Certificate (NDC) or Closure Letter while closing loans stating that the loan stands closed and then report it as closed on your CIBIL Report. Settled: If you have partly paid the dues and settled a loan or credit card, then the status will reflect as settled in your credit report. When you settle an account, it means that the credit institution is agreeing to accept a payoff amount that is less than the amount originally owed. Because the lending institution is taking a loss, a status of settled may be considered potentially negative and detrimental to the chances of loan approval. It is important to understand that though there will be no impact of the settlement flag on your CIBIL TransUnion Score, your credit history will show a settled status in your CIBIL Report and there will be Days-Past-Due reflecting on the report since the payment on the loan has not been timely. Each bank has its own policy of viewing a settled status and will decide on your future loan applications accordingly.
Written Off: When you are not able to make payments against the outstanding loan/credit card amount for more than 180 days, the lender is required to write off the amount in question. The lender then proceeds to report this on your CIBIL Report as Written off. This is a detrimental status for the approval of your loan or credit card applications, as the lender may not want to provide a loan or credit card to someone who has not paid dues on past loans or credit cards. If the CIBIL Report shows a settled or written off status, then it may get difficult for the individual to obtain a loan.
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