Steps to Clear a Suit Filed in Your CIBIL Report

You must understand what a CIBIL report is and why it is important for your business loan. TransUnion CIBIL provides a CIBIL report, which is a comprehensive record of your credit history that includes your credit score, credit accounts, and repayment behaviour. Lenders use this report to determine your creditworthiness when you apply for business loan or credit card. A suit filed status on your CIBIL report shows that legal action has been undertaken against you for nonpayment of dues, which can have a major influence on your CIBIL score and future credit availability. In this detailed guide let us explore the nuances of a CIBIL Report, its significance and steps to clear a suit filed in your CIBIL report to regain your creditworthiness.

CIBIL Report and Its Importance

A CIBIL report is a detailed record of a person’s credit history produced by the TransUnion CIBIL, one of India’s top credit information providers. This report contains information on your credit accounts, repayment history, and CIBIL score (which varies from 300 to 900). A higher score suggests more creditworthiness. The CIBIL report is allows lenders to analyse the risk of lending business loans to you.

Step by Step Guide to Clear Suite Filed Stauts off Your CIBIL

Step 1: Obtain your CIBIL Report

The first step in dealing with a litigation or suit filed in your CIBIL report is to get a copy of that report. You can acquire it by visiting the official CIBIL website and obtain your report. A comprehensive review of your report will assist you in determining the suit filed status and any other issues that must be addressed to ensure a clean portfolio for business loan eligibility.

How to Get Your CIBIL Report:

• Visit CIBIL’s official website: https://www.cibil.com/select-plan
• Provide the relevant personal information and identity verification.
• Pay the required charges to view your report.

Step 2: Identify the Suit Filed Status

Once you obtain your CIBIL report, carefully review it to determine the status of the suit filed. This status is normally shown in the ‘Account Information’ section. It would be labelled as “Suit Filed” or “Wilful Default.”

Key Information to Remember:

• Name of the lender who filed the lawsuit.
• The amount payable.
• Date of filing.
• Current status of the lawsuit (resolved, pending, etc.).

Step 3: Contact the Lender

After determining the suit filed status, the next step is to contact the lender who filed it. Communication with the lender is vital for understanding the cause of the litigation and exploring solutions for resolving the situation. This will help you reclaim a healthy credit history and enhance your chances of eligibility for business

Key Points to Discuss with the Lender:

• Reason for the suit’s filing status.
• The outstanding amount and any additional charges.
• Possible solutions for settling the dues (e.g., payment plans, settlements).

Step 4: Pay the Outstanding Dues

To clear the suit filed status, you must fulfil your remaining loan for business debts with the lender. This can be accomplished through multiple approaches, depending on your financial status and the lender’s policies.

Methods to Settle Outstanding Dues:

• Full Payment: Paying the whole outstanding balance, including any extra charges.
• Negotiated Settlement: Working with the lender to settle the debts for a reduced sum. This may necessitate a lump-sum payment.
• Payment Plan: Creating a payment plan with the lender to pay off the business loan debts in instalments.

Step 5: Get a No-Dues Certificate

After you have paid the outstanding balance, get a ‘No Dues Certificate’ from the lender stating you have settled all your loan for business debts. This certificate proves that you have paid off all of your debts and the matter has been resolved.

Steps for Obtaining a No Dues Certificate:

• Send a formal request to the lender.
• Provide proof of payment (receipts and transaction data).
• Ensure that the certificate specifies that there are no outstanding balances.

Step 6: File a Dispute with CIBIL

After receiving the No Dues Certificate, you can file a dispute with CIBIL to alter your record. This is a crucial step to ensure the suit filed status is removed from your CIBIL report and you regain your eligibility for the line of credit.

Step 7: Get a No-Dues Certificate

How to File a Dispute with CIBIL?

• Visit the CIBIL Dispute Resolution webpage: https://www.cibil.com/consumer-dispute-resolution.
• Go to ‘Consumer Resolution’ section, click on ‘Consumer Dispute Resolution’ and provide all relevant information, such as the account number, lender’s name, and reason for the disagreement.
• Upload the No-Dues Certificate and any additional supporting documentation.
• Submit your dispute form.

Step 8: Monitor the Dispute Resolution Process

After registering a disagreement, it is critical to monitor the settlement process. CIBIL normally takes 30 days to settle complaints. However, this time frame might vary depending on the situation or additional document requirements.

Steps for Monitoring the Dispute Resolution Process:

• Log in to your CIBIL account regularly to monitor the status of your case.
• Under the ‘Consumer Resolution’ section, there is an option named ‘Resources’ that allows you to keep track of necessary proceedings.
• Follow up with CIBIL if the status does not change within the predicted time range.
• If you require any further information or paperwork, please contact your lender.

Step 9: Review Your Updated CIBIL Report

When the issue is resolved, get a new copy of your CIBIL report to check that the suit filed status has been erased. This step is critical to ensuring that your credit report appropriately reflects the outcome of the Dispute Resolution Process.

How to Review Your Updated CIBIL Report:

• Request a fresh copy of your CIBIL report using the CIBIL website.
• Check that the suit filed status is no longer active.
• Check for any further inconsistencies or concerns that may require addressing.

Step 10: Seek Legal Advice

Although getting your suit filed cleared is pretty straightforward process through the CIBIL website, you can always consult a legal advisor or lawyer. Understanding the trivialities of the suit filed can sometimes be tricky and seeking legal help can ease your burden.

Removing a Mistakenly or Unfairly Suit Filed from CIBIL

There can be instances where a suit is mistakenly/unfairly filed. Follow these steps to remove the incorrectly or unjustly filed suit from your CIBIL report:

1. Contact the Credit Bureau: File a written dispute with the credit bureau or a dispute claim on CIBIL’s website. They will examine and amend your record if you are not at fault, usually within 30 days.

2. Communicate with the Lender: Explain the error to the lender and suggest a settlement to have the suit removed from your report.

3. Be Patient and Persistent: These processes can be time taking, so patient is the key here. Seek legal advice if necessary to understand your rights and responsibilities.

Importance of Clearing a Suit Filed on Your CIBIL Report

Clearing a suit filed status from your CIBIL record is important for various reasons:

1. Improved CIBIL Score
   A suit-filed status will drastically reduce your CIBIL score, making it harder to get any kind of working capital loans, business loan and credit cards. By resolving the issue, you can gradually enhance your credit score and subsequently improving your creditworthiness.
2. Better Loan and Credit Approvals
   Lenders are more likely to approve your loan for business applications if you have an impressive CIBIL report with no litigations under your name. Clearing this status boosts your chances of being approved for line of credit loan.
3. Lowered Interest Rates
   A better CIBIL score due to a clean credit report will help you acquire reduced business loans interest rates. A strong credit history projects you as lower-risk borrowers, resulting in better business loan opportunities with reputed lenders.
4. Enhanced Financial Health
   Maintaining a clean CIBIL report demonstrates responsible financial behaviour, which is essential for long-term financial health. It enables you to obtain desirable line of credit when required and manage your money more effectively.
   

Best Practices for a Healthy CIBIL Report

Following these tips will help you maintain a healthy credit history and keep your CIBIL report clean of any unfavourable suit filed:

1. Timely Payments
   Always repay your business loans on time. Late payments can have a negative influence on your CIBIL score and lead to legal measures such as lawsuits. Regularly paying off any outstanding obligations helps prevent accruing interest and penalties.
2. Regularly Monitor your Credit Report
   Check your credit report regularly to look for any errors or poor statuses. Early identification enables you to fix concerns quickly and retain a good credit score.
3. Maintain a Low Credit Utilisation Ratio
   Keep your credit utilisation ratio (the amount of credit you utilise relative to your credit limit) under 30%. Higher credit utilisation ratio can reduce your CIBIL score and signal financial distress.
4. Diversify Your Credit History
   Having a mixed credit history, for instance, such as secured loans (e.g., home loans, vehicle loans) and collateral free business loans and persoanl, can help improve your CIBIL score. It indicates your capacity to handle multiple line of credits.
5. Avoid Multiple Loan Applications
   Applying for multiple loans at a time will negatively impact your CIBIL score. Each application generates a hard inquiry on your credit record, which might reduce your score.

Summing Up

Clearing a suit filed status from your CIBIL record is an important step towards improving your credit score and financial wellness. By following the steps provided you can easily address any issue in your CIBIL and ensure that your credit report appropriately represents your creditworthiness. Maintaining a clean CIBIL record through prudent financial behaviour is essential for acquiring desired loans for business at reasonable rates and establish a long-term financial stability. If you are searching for collateral free business loans at minimal interest rates and flexible repayment tenure, FlexiLoans is your one-stop destination. This fintech organisation provides MSME loans, business loans and more with limited credit history in a streamlined digital process.

FAQs

Q.1 What is the suit filed status on a CIBIL report?
Ans: A suit filed status on a CIBIL report shows that a lender has taken legal action against you for non-payment of dues. This status has a substantial influence on your credit score and ability to obtain credit.

Q. 2 How does a suit filed status influence my CIBIL score?
Ans: A lawsuit filed status negatively impacts your CIBIL score, making it difficult to get loans or lines of credit. It suggests a pattern of non-payment, which lenders consider high-risk behaviour.

Q. 3 Can I get a suit filed status removed off my CIBIL report?
Ans: Yes, a suit filed status can be cleared off your CIBIL record by resolving the outstanding dues with the lender, receiving a No Dues Certificate, and filing a dispute with CIBIL to update your report.