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How to 'settle' your credit card woes!

August 19, 2015 08:18 IST

If your loan was rejected because you had just 'settled' your outstanding dues and not 'closed' it altogether, then here's how you can get this loan approved. 

Rohan Apte, a gazetted officer with the Indian Railways, had a stringent timetable not only for his professional tasks but also for his financial and personal obligations. His year was planned with an online calendar marked with official commitments, holiday dates, his children's school meeting dates, family functions as well as his monthly electricity, phone bill, loan EMI and credit card bill due dates.

Being a man as disciplined as he was, both on the professional and personal front, Rohan checked his CIBIL Report and CIBIL Transunion Score before applying for a car loan. With a score of 784, Rohan was certain of driving the car home for the upcoming Ganesh festival. Prior to filling the loan application, Rohan consulted a banker friend in order to ensure his eligibility for the loan and also showed his friend the CIBIL Report and CIBIL TransUnion Score.

On reviewing Rohan's CIBIL Report, his friend informed Rohan that although he had a high CIBIL TransUnion Score, his loan application may not get approved as one of his old credit card account showed a 'Settled' status. Rohan had made a settlement on a credit card he owned three years back, on which he had accrued dues.

A baffled Rohan failed to understand this and asked his friend how a settled status on a three year old credit card account could have an impact on his loan application. After all he had a high credit score.

Rohan's friend then explained to him some vital facts:

Having explained the implications of 'Settlement' to Rohan, his banker friend advised Rohan to get this 'settled' flag removed from his credit report before applying for the car loan. He counselled Rohan to initiate these steps:

By diligently following the counsel of his friend Rohan was able to get the settled flag removed from his credit report. After accessing his fresh credit report and ensuring that the credit card account now showed 'Closed' status he applied for the car loan which got approved instantly. Rohan is now looking forward to driving his own car home for the upcoming Ganesh festival.

Illustration: Uttam Ghosh/Rediff.com

Harshala Chandorkar is Senior Vice President -- Consumer Services and Communication, CIBIL

Harshala Chandorkar