How to Remove Settled Status from CIBIL?

This is what I assumed up until I saw my CIBIL report. Just when I understood what it was, I wanted to know how to remove settled status from CIBIL. If you are in an illusion just like I was, you must first know what the concept of settled is.

Suppose you took a loan from the bank and duly paid the EMIs but towards the end of your loan tenure you somehow aren't able to repay the full loan amount. So in this case the bank agreed to settle your account for a lesser payment than what was due. 

Banks mark such cases as ‘settled’ and not ‘closed.’

So now the question arises

how do I remove a settled account from my credit report. 

Thankfully a banker friend suggested in such a case that I should repay the complete loan amount, get the NOC from the bank and raise the dispute on CIBIL website.

Once you raise the dispute, the credit bureau will check in with the bank and change the status from ‘Settled’ to ‘closed‘ in your CIBIL report. 

I hope now you have clarity on what is ‘Settled’ and how to remove settled status from CIBIL.

I was so happy to see the “settled status” on our Bajaj Finserv home loan documents. Once you pay the debt or loan amount post concession, the loan is marked as settled. The loan executive asked me to follow some steps to change my settled status to closed status. Let me share the process of how to change settled to closed in CIBIL in brief.

How to Change Settled to Closed in CIBIL SBI?

The loan executive was very helpful and explained to me how to change settled status in CIBIL in detail. Here is how you can change the status:

• Once you have paid the outstanding debt, you will receive a statement mentioning that your loan is settled. Ask the loan executive to provide you with the NOC or No Objective Certificate, next

• Once you get your NOC, raise a dispute on the

  CIBIL website

• The Credit Bureau will confirm the details, update the bank or lending institution and change the status from “settled” to “closed” within a month

You will be informed about it on your registered mobile number or you can also visit the bank and confirm. 

You can also read Kamal’s comment about removing “settlement” status from CIBIL by following the steps he mentioned.

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My credit history and the possibility of receiving positive responses on future loan and credit card requests both were negatively impacted. It is because of the loan settlement that was appearing on my CIBIL credit record. But then I consulted my lawyer to know about the CIBIL dispute raise.

How to remove credit card settlement from CIBIL?

When you don't pay your bills, your lender will initiate a case against you by submitting a complaint to the court. In this situation, you can contact the lenders and request an out-of-court settlement. The lender has to drop its legal action against you if you accept to pay the full sum that is still owed to them under this settlement. 

But keep in mind that you can only get the case dismissed once you pay the bill. When you complete the payment, the lender must modify CIBIL in order to reflect the new status of your loan repayment. If you accept to return the whole sum, this is a simple option to have your name removed from the CIBIL settlement record.

How to remove settled loan from CIBIL?

A different option would be to request a loan amount reduction from the lender. Perhaps they will also accept that. You pay the loan what you and the creditor have discussed and agreed for, rather than paying a return of the whole sum. But, a condition of "Settled Account" will remain on your CIBIL credit history for a total of 7 years after the case is withdrawn from your name.

You must have understood the process of the CIBIL dispute raise.

You know what Mr. Srivasu, I was in a similar situation as you. I took a personal loan right before the pandemic hit us and my repayment plans got messed up. I tried my best to repay the full loan amount with interest but I ended up repaying just the 95% of the dues by the time repayment tenure got over. The bank said they will mark the loan as settled. So I thought cool, that is actually very considerate of them. Little did I know how it would affect my credit report. I saw that my CIBIL dropped and when I asked my bank manager about the reason, he said it was because the loan wasn’t cleared but settled. He explained the impact to me and I was in disbelief. I asked him how to remove name from CIBIL after settlement. He suggested the same thing that you have mentioned. 

• I visited the CIBIL website at www.cibil.com

• Since I already had an account, I logged with my credentials

• I went to the section that said ‘Credit Reports.’

• Next, I clicked on ‘Dispute Centre’ and ‘Dispute an Item’.

• I had to fill the CIBIL dispute form and choose the relevant section.

• Next on how to clear settled status in CIBIL, I selected ‘Dispute Type’, and hit ‘Submit’.

It took approximately a month for the status to be verified and resolved. Up until then I was just worried about

how to remove settled accounts from credit report in India.

Finally I was able to get everything cleared.

I hope now you know how to remove name from CIBIL after settlement.

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