Introduction
Among the most famous credit bureaus in India, is the Credit Information Bureau (India) Limited, which is commonly referred to as CIBIL. This institution assumes significance as it offers banking and other financial institutions the facility to verify individuals’ and corporate houses’ creditworthiness. Your CIBIL report is accompanied by three-digit scores that reflect your credit history, showing your past performance while handling finances or taking any loans. This helps the lenders in accepting or rejecting decisions for your loan application.
Sometimes, you face a situation where on your CIBIL report, there is a status of “suit filed.” That is due to a situation wherein a bank or financial institution files a lawsuit against you when your debts or loans remain unpaid. A suit filed status can damage your credit report and may even make it hard to get credit in the future. This can be indicated within a suit filed status explanation.
Let’s see what is a suit filed status and its impact on your credit score which have an impact on many things like your business loan online application approvals. We will also go over what you can do about the situation to have it removed.
What is a CIBIL Suit Filed Status?
It means that you do not pay some of your debts. It may occur when you stop paying loans or other debt repayment obligations. The lender would first have tried all other options at their disposal to recover their money but was unable to. So they have taken it to the courts. Therefore, for there to be a case against you, it means that there is a “suit filed”.
Complaint filed status against you will have a very bad effect on your credit score. This would give people the impression that you would be a high-risk customer for potential lenders and, hence, reject your loan applications more easily. So, this is something that needs to be checked and closed before financial issues arise later in life.
How to Clear Complaint Filed Status from Your CIBIL Report
Check Your CIBIL Report
The first action towards removing the suit filed status is to keep an eye on your CIBIL report frequently. You can obtain an online copy of your credit report from the CIBIL website. Once you receive your credit report, carefully review it. Ensure whether any suit filed status is reflected in the credit report. If you find one, take immediate action to get rid of it. You can call the lender for this purpose.
Once you identify which lender has filed a case against you for not clearing the borrowed loan amount, you can reach out to them to know why this is being done. Sometimes, suits get filed due to some unwanted miscommunication, so talking to the lender clarifies the problem, and the problem is usually solved.
Settlements
Try negotiating a settlement if you owe money to the lender. Most of the time lenders actually communicate and work with borrowers to come up with some sort of repayment plan that works both for lenders and borrowers as well. This could be paying the sum in full or agreeing on reduced payments.
Pay Your Dues
Arrange to pay the amount within the agreed time. Once you have deposited your amount, ask him to issue you a No Objection Certificate (NOC) stating that you have repaid your dues. This no-objection certificate would help you to close or remove this suit filed status from your CIBIL report.
Request the Lender to Update Your CIBIL Report
Once you pay off the debt, request the lender to update your CIBIL report. Sometimes, even after clearing dues, the status does not get reflected. Write a formal letter or share a mail to the lender requesting them to notify CIBIL that the issue is settled. The lender should reflect your status as “settled” or “closed”. This will work in improving your credit rating.
Escalate a Dispute with CIBIL
If the lender does not update your report, you can escalate a direct dispute with CIBIL. CIBIL provides an online dispute resolution service through which they can assist and verify the information provided to them by you through all the formal documents, including your settlement letter and No Objection Certificate. When everything is found to be correct, they ensure that your report will be updated accordingly.
What Should You Do If Lawsuit by CIBIL
Assuming you have already received a legal notice or part of a lawsuit due to unsettled loan payments, do the following so that your chances for collateral free business loan doesn’t get affected.
Respond to the Legal Notice
Never miss a legal notice. The response to the notice shows that you have the intent to comply. Failure to follow up on the notice can pose further effects, which will still worsen your case in court.
Engage a Legal Advisor
Proceedings of lawsuits can be very stressful and intricate. It is, therefore beneficial to have a lawyer specializing in financial disputes to enlighten one about their rights and course of action. A legal advisor can attend the court on your behalf in order to represent your case and negotiate with the lender.
Gathering Evidence
Collect all loan or credit account documents. These will include loan agreements, repayment records, bank statements, and even letters between you and your lender. These help to make your case strong and may well prove to be the key factor for resolving matters immediately.
Consider Settling Out of Court
Sometimes, you can even settle it out of the court. If your lender is willing to compromise, then a mutually agreeable settlement will be reached. That may spare you a long court case dragging on for months, and control the damage done to your credit score becomes low.
Keep an Eye on Your CIBIL Report
Even after the settlement of that lawsuit, you should keep track of your CIBIL report. You should check whether the status of the reported suit is filed and whether the credit score has started improving.
Conclusion
A “suit filed” status on your CIBIL report can seriously damage your credit score and reputation with the lenders. Following the above-discussed instructions, such as negotiating with the lender, paying the dues, and then ensuring that your CIBIL report is updated. Answering legal notices, taking the opinion of lawyers, and proactive approach in comparison can help a person overcome the challenges a lawsuit will encounter in the near future. You can save your creditworthiness by following the proper procedures and keeping records of your CIBIL report to gain access in the future for loans or other credit facilities.
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