How to Remove Settled Status from CIBIL Report
How to Remove Settled Status from CIBIL Report: A Complete Guide
A “Settled” status in your CIBIL report can negatively impact your credit score and make it difficult to secure loans in the future. This guide will walk you through how to remove the settled status from CIBIL and improve your credit profile.
What Does Settled Status in CIBIL Mean?
A settled status appears in your CIBIL report when you have paid an amount lower than the total outstanding balance agreed upon with the lender. While this resolves the loan, it is not considered a clean closure and affects your credibility in the eyes of financial institutions.
Why is the Settled Status a Problem?
Negative impact on your CIBIL score
Difficulties in getting new loans or credit cards
Lenders see you as a risky borrower
Higher interest rates on future loans
To avoid these issues, it’s essential to remove the “Settled” tag from your credit report.
Steps to Remove Settled Status from CIBIL
1. Contact Your Lender for a Full and Final Settlement
If you have settled a loan or credit card in the past, the first step is to contact the lender. Request them to convert the status from ‘Settled’ to ‘Closed’ by paying the remaining balance.
How to Negotiate with the Bank/NBFC:
Check your past records to confirm the outstanding balance.
Visit the bank/NBFC branch or customer care and explain your case.
Request a goodwill adjustment by paying the pending amount.
Obtain a No Dues Certificate (NDC) after clearing the full amount.
Ask the lender to update your CIBIL report from ‘Settled’ to ‘Closed’.
2. Dispute the Settled Status in CIBIL
If you believe the settled status is incorrectly reported, you can file a dispute with CIBIL.
Steps to Raise a Dispute Online:
Go to the CIBIL Dispute Resolution Portal – www.cibil.com
Log in with your credentials or create an account if you don’t have one.
Select ‘Credit Report Dispute’ and choose the account with the settled status.
Provide necessary details and supporting documents.
Submit the dispute request and wait for resolution (typically takes 30-45 days).
3. Send a Formal Letter to CIBIL & the Lender
If online disputes do not work, you can send a formal written request to both CIBIL and your lender.
Sample Letter Format:
Subject: Request for Removal of ‘Settled’ Status from CIBIL Report
To,
The Credit Manager,
[Bank/NBFC Name]
[Branch Address]
Respected Sir/Madam,
I am writing to formally request the removal of the ‘Settled’ status from my CIBIL report for Loan/Credit Card Account Number [XXXXXX]. I have now cleared the remaining dues and request you to update my credit report as ‘Closed’.
Enclosed Documents:
No Dues Certificate (NDC)
Payment receipts
CIBIL Report showing ‘Settled’ status
Please process this request at the earliest. Looking forward to a positive resolution.
Sincerely,
[Your Full Name]
[Your Contact Details]
4. Maintain a Good Credit Score to Improve Your Report
After updating your credit report, focus on improving your credit score:
Pay all EMIs and credit card bills on time
Keep credit utilization below 30%
Avoid multiple loan applications in a short time
Monitor your CIBIL report regularly
FAQs on Removing Settled Status from CIBIL
Q1: How long does it take to remove the settled status?
It typically takes 30-45 days after the lender updates your details with CIBIL.
Q2: Can I remove the settled status without paying the remaining amount?
No, banks will only update your report to ‘Closed’ if you clear the pending dues.
Q3: Will my CIBIL score improve after removing the settled status?
Yes, your score will gradually improve once the status is updated to ‘Closed’.
Conclusion
A settled status in your CIBIL report can block future financial opportunities. However, by following the right steps – negotiating with lenders, raising disputes, and clearing dues – you can remove it and improve your credit health.
Take Action Today!
Check your CIBIL report now for any settled accounts.
Contact your lender to clear dues and request a status change.
File a dispute with CIBIL if needed.
Maintain a healthy credit history to avoid future issues.
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