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Tuesday, April 28, 2009

Pay Your Credit Dues Regularly

Pay Your Credit Dues Regularly otherwise your name will be listed in CIBIL ..... CIBIL ?????

Anuradha Nayaab lives in Bangalore. When she needed some money, she decided to knock on the bank's door for a loan. She decided to mortgage her house worth Rs 30 lakh for a loan of Rs 15 lakh. She applied for a Loan against Property (LAP) with a public sector bank; sadly it got rejected. Not wasting any time, she approached another bank; the loan application got rejected again! It was tough luck.

Surprised with the turn out of things, Anuradha enquired with the banks to reason out. She was told that her name was listed with the Credit Information Bureau (India) Limited, also known as CIBIL.

What is CIBL?

CIBIL is a repository of information that contains credit history of borrowers. It generates credit report of borrower’s repayment history, settlement, defaults, contact details. Lenders have access to it.

How did this happen?

On probing further into the matter, Anuradha found out that she had defaulted payments on her two credit cards. She had taken credit cards from two different banks in the year 2004. Until the end of 2008, she was disciplined in her repayments but when emergencies crept up, credit card payments slipped her priority list.

Consequence— her name was listed with the CIBIL as a defaulter.

Anuradha decided to resolve the matter. She got in touch with the credit card companies. She was told that one of her credit card was deactivated and the amount on second one was written off because she had ignored her payments.

How did her name appear on CIBIL list?

Anyone who has borrowed from a lender will have his/her name with CIBIL. This list includes even those who make their payments on time. "The issue arises when the repayment history against your name shows defaults such as in Anuradha's case. When your name appears as a defaulter, it effectively shuts off your access to future credit except for fully secured loans," says Harsh Roongta, CEO of apnaloan.com.

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