Can you remove Auctioned and Settled status from your CIBIL report?
Do you have an “Auctioned and Settled” status on your CIBIL report? According to the latest credit reporting format, “Auctioned and Settled” is a newly introduced terminology used to describe the status of a loan account. You might notice this credit facility status on one of your collateral-backed secured loan accounts, where the collateral was seized and auctioned by the lender due to non-payment. At this point, several questions may arise in your mind: What does “Auctioned and Settled” actually mean? How does it impact your CIBIL score? And most importantly, how can you remove the “Auctioned and Settled” status from your CIBIL report?
Don’t worry! In this article, we’ve covered all the points in detail. So, let’s start the discussion with a basic understanding of “Auctioned and Settled” status in a CIBIL report.
What does “Auctioned and Settled” status mean in CIBIL report?
The “Auctioned and Settled” status is typically reported on secured loan accounts, such as gold loans, vehicle loans, and mortgage loans, and so on. It combines two key banking terms: ‘auction’ and ‘loan settlement.’
In the banking industry, auction is the process of recovering the loss from an unpaid debt by reselling the collateral that seized from the borrower due to non-payment.
On the other hand, loan settlement refers to closing a loan account by accepting a payment lower than the actual outstanding loan amount.
This means that when the lender auctions the collateral, but the recovered amount is less than the total outstanding loan balance, in that case, they report the loan account as “Auctioned and Settled” in the borrower’s credit report.
For example, you take out an auto loan, where your vehicle is financed by considering it as security or collateral. Now, when you repeatedly default on your EMI payments, the interest, penalty charges, and bounce fees will gradually accumulate on the principal amount.
Initially, the lender will notify you to make the overdue payments. However, after a certain period, if they realise there is no chance of recovering the loan, they will repossess or seize your vehicle and sell it at an auction.
Since the vehicle is a depreciating asset, that’s why the amount recovered from the auction may not cover the entire outstanding loan balance. As a result of this shortfall, the lender will treat it as a loan settlement and update the loan status to “Auctioned and Settled” in your CIBIL report.
How does the “Auctioned and Settled” status impact CIBIL score?
Just like loan settlements, the status “Auctioned and Settled” has a similarly negative impact on an individual’s CIBIL report. It indicates that you were unable to meet your financial obligations. As a result, when you apply for a new credit facility, lenders will perceive you as a high-risk borrower and simply reject your loan application.
However, the good news is that you can remove this negative remark from your CIBIL report permanently. In that case, you have to pay the deficit amount to the respective lender in order to remove the “Auctioned and Settled” status from your CIBIL report. So, let’s understand the entire process stepwise.
Process to remove “Auctioned and Settled” status from CIBIL report:
Contact with the lender:
If you notice, there is an “Auctioned and Settled” status mentioned in one of your prior loan accounts; in that case, contact the respective lender. Inform them that now you want to pay the deficit amount and close the loan account in a standard way. Ask them to provide the standard loan closure amount for this purpose.
You can contact the respective lender by sending emails to their customer support team or by visiting the loan-availing branch. However, always try to collect the payment details in written format.
Pay the remaining outstanding amount and collect NOC:
After getting the payment details, pay the same amount accordingly. Don’t forget to collect the full and final No Dues Certificate against the loan, as it will be required when you raise a dispute in CIBIL.
Raise an online dispute in CIBIL:
Now, it’s time to update the loan status in your CIBIL report. There are several channels through which you can raise an online dispute in CIBIL. However, the two most convenient ways are
• Raise an online dispute through my CIBIL Portal:
In this method, log in to your CIBIL portal by using your CIBIL User ID and Password. Navigate to the “Raise a dispute” section. Select the particular loan account and change the credit facility status from “Auctioned and Settled” to “Clear Exiting Status”. Follow the instructions and submit the dispute accordingly. After successful submission, a dispute id will be generated, starting with P29032025……keep the dispute
• Submit a written complaint in CIBIL:
In this method, you can write the complaint briefly along with all the evidences that support your claim. For this purpose, go to the CIBIL official website and visit the Contact us page: https://ssp.cibil.com/contact-us/newApplicationForm/cd3f3? Fill the dispute form with your KYC details and describe your query within 3000 characters. Always mention the CIBIL report control number in your complaint, so that the CIBIL customer support team can retrieve the particular report from their end.
Attach the supporting documents, like your KYC, CIBIL report, Payment proof, and No Dues Certificate, etc. You can attach a maximum of 5 documents in PNG, JPG, JPEG, or PDF format. After successful submission, a Service Request Number will be generated.
• Email sent to CIBIL authorities:
After raising your concern to the CIBIL customer support authority, if they fail to resolve your query within 30 days or you are not satisfied with their response, in that case, you should escalate your grievance to the CIBIL higher authority, such as the Nodal officer and Principal Nodal Officer. Send an email to them by mentioning your prior complaint IDs.
CIBIL Escalation Desk:[email protected]
CIBIL Nodal Officer:[email protected]
• Send a request to the respective lender:
As per the Credit Information Company Regulation Act 2005, CIBIL don’t have any authority to modify any information in your CIBIL report without confirmation from the respective lender who reported the disputed details to them. That’s why, when you are raising a dispute in CIBIL, simultaneously send a separate request to the lender and request them to remove the “Auctioned and Settled” status from your CIBIL report. It will help to resolve your issue earlier.
• Register an RBI Ombudsman complaint:
If your issue is still pending, then you can approach RBI Ombudsman along with all the previous complaint IDs and the complaint records that you have made with CIBIL and the lender. For this purpose, register a complaint through the RBI CMS Portal or send an email to [email protected].