Negative flags on your credit report not only remind you of your past financial mistakes but they also ruin your future financial plans. Whether the negative remarks occur due to your own mistakes or due to the negligence on the part of the credit bureau, you must make efforts to get rid of them. After all your credit report affects the most important financial measure, that is the credit score. A low CIBIL score will not only affect your ability to secure loans and credit card approvals, but it will also determine the interest rates that you pay on them.

Here are some strategies to remove unfavourable entries from your credit report.

Mistakes and errors by the bureau

The first step is to order your credit report and look for accounts and entries that are responsible for your low CIBIL score. Find out whether the black marks are due to your own carelessness or inaccurate reporting on the part of the bureau. Any errors or mistakes can be disputed with the credit bureau. File a dispute online or send the details and copies of proof via an email. The bureau will verify the information with the lender and correct the mistakes if there are any errors. To speed up the process, you can even contact the lender directly and submit the proofs to support your claim. You may need to follow up with the bureau several times and ask for the updates.

But what if the negative information on the report is accurate and you indeed missed payments. The lenders have an obligation to report accurate and complete information to the credit reporting agencies. So it is unlikely that they will stop reporting negative information if you simply ask them to. Let’s explore the options you have in such cases.

Ask for a “Goodwill adjustment”

This method works well if you had a good credit history in the past and are trying to remove a late payment or a paid collection. Write a letter to the bank explaining the reason for the delay in payment. If you’ve had a good relationship with your bank and if you’ve always been diligent in repaying your dues in the past then you may get lucky. The bank may agree to overlook a single missed payment that may have occurred due to negligence. It may agree not to report the late payment information to the bureau. Remember the creditors are not obligated to remove the negative information just because you ask them to, but many do it out of goodwill. You need to be really persuasive and convincing so that the creditor agrees to overlook the slip-up.

Pay for delete

If you have unpaid collections or charge-offs; you may bargain for a deletion of the entry from the credit report in return of the payment. Negotiate on the amount that you intend to pay for the settlement and get it in writing. Make sure that the lender does not report the account as “settled”. The credit report should reflect that the account is “paid in full” or “as agreed”.

Build credit

If you aren’t able to clean up the negative flags from your CIBIL report, work on building a positive credit history. Improve your financial habits and exhibit positive credit behaviour. Make consistent on time payments and keep utilization on your credit cards low. Slowly new positive information on the report will overshadow your past mistakes.

Having negative remarks on the credit report can be extremely frustrating. But once you understand the measures that you can take to get this kind of information removed you can start your journey towards building good credit.

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December 2020