The Negative Flags

Current Balance (Old due)

• It is the amount you still owe on a particular credit facility.
• Lenders typically take 30–45 days after payment is received to update this information to the Credit Bureau.
• For example, You have taken a two wheeler loan of Rs. 50,000 in 2011 and as on today’s date if some amount is still pending to pay that amount shows in Current Balance category.

Overdue

• A late payment record can pop up on your credit report when you forget to pay or are unable to pay a bill by the due date.
• The creditor can report your late payment to the credit bureaus once you are 30 days due the payment date, and the late payment can remain on your credit reports for longer period of time.

Settlement

• When a debt is uncollectible by the lending institution, they may agree to settle the outstanding balance in the interest of recovering at least the principal amount.
• The balance amount is waived by the lending institution which indicates the “settle” amount in Credit Report.
• For example, you owe Rs. 10,000 as a loan and you have paid Rs. 6,000. The remaining amount of Rs. 4,000 was waived off by bank which means here you have settled your loan in lump sum amount of Rs. 6,000 and you will receive Settlement Letter.

Post (WO) Settlement

• This status is also similar to the settled but only difference is that settlement is done after the account is written–off.
• In short, the bank has already written off the amount and after that the defaulter approached for settlement.

Written off

• The objective of a bank in case of a default is to recover the amount. If all the efforts fail and the bank is not able to recover the dues then it is reported as written off (WO). Bank cannot retain NPAs in their book of accounts forever, therefore these types of loans are written off in accounts.
• In short, they are not carried forward.
• The written off status is subdivided into WRITTEN OFF (TOTAL) and WRITTEN OFF (PRINCIPAL).
• In the case of total, the 100% amount is written–off including principal and interest.
• In the principal, the total principal amount written off is reported.
• Basically, the objective of reporting these 2 sections is to find out written off interest.

 Willful Default

• In layman terms, willful default means defaulter has the financial ability to pay and clear the loan, but the default is intentional in nature.
• For Example, Recently Vijay Mallya was declared willful defaulter by some of the banks. In short, he has money to pay but he doesn’t want to pay.
• In such cases, as per RBI’s guidelines, the bank will report either of the following status in your credit report.

1. Blank means no suit filed
2. Suit Filed
3. Willful Default
4. Suit Filed (Willful Default)

Suit Filed

• It is the status of your loan account. In case you have defaulted in meeting your repayment obligations, and the bank has filed a case against you, then it would be reported under this section.

In brief, your financial future plans depend on your past mistakes. In case any of the above pops out in your credit report, it means there is a need to take some serious efforts to rectify it. Have you checked yours?