I had an ICICI Bank credit card. I did a transaction of Rs 22,000 (purchases) in October 2006. Since then I have not repaid the same. Now the total amount due is Rs 38000(22000+interest n charges). Bank had called me to pay the total amount of Rs 38000. Is it fine if I pay only Rs. 22000, since the bank has told that this will be the full n final settlement. But I wanted to know if this will it affect my CIBIL REPORT? If I can pay only Rs 22000 in installments, will it correct my CIBIL REPORT? Kindly help.
When the bank says you need to pay a certain amount, it is better you pay it at the earliest. You can visit the head branch and negotiate from the final proposed amount of Rs. 38,000. They might decrease some value from the final amount, but most of the banks will not accept installments at this stage. Since you have defaulted for more than 6 years, it will certainly affect your credit score. So it is better to pay off the remaining amount and settle the issue with the bank. Eventually, when you clear all your debts, it will boost your credit score.
If the outstanding as of today is
38,000 and you only pay22,000, this means that the bank is asking you to make the settlement on the said account. The account status will appear as “Settled” on your credit report. This is viewed negatively by the lending institutions and will have a negative impact on your credit score.
Please do confirm with the lending institutions that are they offering you a ‘settlement’. Do confirm with the bank that how this account will be reported in your credit bureau report and also make sure the NOC has the details in it.
It is always advisable to pay the entire amount to clear all your dues and close the account.
To know more about credit bureaus and how they affect your credit life, you can download our free E-Guide on Credit, Credit Bureaus and all that: http://www.credexpert.in/eguide/
If you do not pay your Credit Card bill, it will have a negative impact on your Credit Score. A final settlement is much better than paying your bill in instalments because it will help you improve your score quickly. You will see your score improving within a few weeks of settling your dues. In case you repay using instalments, it will take months to get your score back on track. Speak to your bank to see if they can reduce the charges levied. Once you fix the final settlement amount, pay it as soon as possible to correct your Credit Score.