Credit Score in CIBIL Defaulters List Affected by Settlement

1. Credit Score in CIBIL Defaulters List Affected by Settlement In dealing with a loan along with its repayment plan, there could be a kind of offer known as one time settlement or OTS which will really be helpful in dealing with problems in the repayment plan but will also affect your credit score in the CIBIL defaulters list. So, despite of the fact that OTS itself is offered by the bank, it turns out that your personal credit score will be affected by that OTS. How this OTS could affect the score? Surely you are completely curious about it, right? So, aside of just being a kind of life safer for those who has certain problems in repaying their load, the OTS could actually ruin the score that you have and could really put you in a terrible spot in the CIBIL defaulters list. Basically the bank that offers this particular solution to those borrowers will make an agreement to write off the differences between the amount of money which has been paid and the amount which is due. Clearly it is a completely genuine life safer that will erase a huge problem away from the borrower with such unseen effects to the CIBIL credit score. CIBIL Settlement Effect in Credit Score Despite of the fact that an OTS is a great solution offered by a bank to the borrower, it can actually drop the score that you have in your credit report. Thus it can also put you in the CIBIL defaulters list in a kind of negative position. This particular thing is caused by the fact that OTS is going to be recorded by CIBIL only as settled aside of closure. A closure is a good behavior in term of dealing with loan. Yet the so- called settled is considered to be a negative behavior. Being a negative behavior in the credit report as recorded by CIBIL, OTS could drop your sore in the CIBIL defaulters list from 75 to 100. Just as you realize that OTS is a terrible thing due to that score drop, it has another bad effect to your record since it will not be able to be deleted for as much as 7 years long. What could be worse to get after you are having OTS from a bank and that your position is completely bad there in the CIBIL defaulters list? Well, surely you will have less chance to be given or granted a loan if you are having this mark on your record of credit. So, clearly it is a fast way out if you cannot pay your loan according to plan but you may not be able to get another one anytime soon. At the end, it is advisable to seek for other solution or way out if you are having problem with your loan repayment. Instead of accepting the offer from the bank in form of OTS, you can probably get another way out which is completely better and that will not affect your score and position in the CIBIL defaulters list.