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Having a settled account on your CIBIL report drastically affects your score. Especially when you try to avail any new credit facility. A settled loan means you have not paid the entire outstanding amount fully, but the lender agreed to close your account against that due amount. It may have given you temporary relief, but the “SETTLED” remarks in your credit history ruin your borrowing opportunity in future. Now, the question is how to remove settled loan from CIBIL report? Well, here is the detailed procedure (step by step).
Steps to follow to remove Settled Loan from CIBIL:
Step 1: Get Your Latest CIBIL Report
To remove settled loan from CIBIL, you have to get your latest CIBIL report. One of the best ways to get CIBIL report is from TransUnion CIBIL official website. Identify the loan account that is marked with “SETTLED” and check all details with special attention.
Step 2: Contact Your Lender
Contact the concerned bank/financial institution from which the loan was availed. Ask whether they will agree to remove the “SETTLED” status mentioned on your credit record. Generally, this would mean that you have to pay the complete outstanding amount first, before they could even think of doing such.
If you agree, you can continue with a different negotiation asking for a written statement that they will update your credit report as soon as they receive payment.
Step 3: Make the Payment
Once you have settled with the amount, you can pay the amounts now. Ensure that you preserve all receipts of transactions for future reference. Ask your lender to issue a No-Objection Certificate (NOC) or a Loan Clearance Letter that proves that you paid the loan amount in full.
Step 4: Raise a Dispute in CIBIL Portal
Then, go to TransUnion CIBIL portal to file an online dispute. To file an online dispute a CIBIL control number is required, which is available on your credit report. When you are filling online dispute, upload the NOC or Clearance Letter. They will then verify with the concerned bank/financial institution and update your credit report in the meantime.
Step 5: Follow-Up
Most likely, it would take approximately one or two weeks in the amendment to remove Settled Loan from CIBIL and reflect the updated data in your CIBIL report. Always check your reports to see whether the “SETTLED” status is removed. In the event of failure to amend that, you need to follow up with the concerned bank/financial institution as well as TransUnion CIBIL.
Why you should remove Settled Loan from CIBIL:
Although it becomes necessary to remove settled loan from CIBIL report, this would additionally improve the credit score of the individual in terms of getting new credit facilities in future. The lenders have a negative view about the “Settled” status and, on the contrary, would refer to a “Closed” status as an indication of financial responsibility on his part.
Final Tip
Paying off loans in totality is always the best practice wherever possible. If payment is not possible, reach out to your lender at the earliest and find out what options can be adopted. If you have already done the settlement, don’t worry, chin up! Just follow these simple steps and get back in control of your credit health.
