Citicard – Payment Defaulted, Account Blocked, then Regularized – Impact on CIBIL Score

Default Payment on Citicard - Later RegularisedIt is not uncommon for the Indian Youth to opt for a Credit Card as soon as they join the workforce and without realizing the consequences they head towards debt trap. Here is a Case which CardBhai’s Team Counseled and with Prior Written Permission of the Client we are publishing his Case Study so that this will help other Credit Card Borrowers / Defaulters understand the impact on Credit Scores.

Raj had a Citibank Credit Card account opened in May-2006. He made regular payments until Oct-2006 and then began to delay which immediately starts getting reflected in his CIBIL Credit Report. He tried his best to regularize his payments but on and off and was negotiating with the bank’s call center executives already for EMIs etc. However, matter became worse and in Aug-07 and Citibank finally decided to BLOCK the Card A/C. Summary of his First leg of Transactions and Payments as reflected in CIBIL Credit Report is Shown below.
Citicard Blocked in CIBIL Credit Report
[Note: Payment Start Date and End Date entries should actually be reversed , Poor Quality of CIBIL Reporting]

Raj re-negotiates with Citibank and reopens the card for transactions in Jan-2008. Raj advised by Credit Counselors is extremely careful about spending on the card and pays his Bill in Full every month. For the next 14 months, Raj’s Credit Score starts improving because of his regular payments and finally the Card is Closed. The Transactions in the Second Leg on the Same Card Account helping Raj Regularize his Status is as shown below.
Citicard Closed - CIBIL Report Extract
In the Above Credit Report, it is also evident that the Written Off, Suit Filed, Default, Settlement have all been left BLANK, means the Customer has closed the Account in Good Standing.

Impact on CIBIL Transunion Score in the above Case ?
For his First Leg of Transaction, Raj will have a Negative Impact on CIBIL Credit Score. However, after Advise from CardBhai Team, Raj regularized his payments and closed the account a bit too early [we had advised him 18 months] but since he had to move to a different city he didn’t want any other hassle and opted to close. After this, Raj was extremely careful and went on a Cooling Period stayed off Credit Cards and finally clinched a Home Loan Last Year and is building solid Credit History and Score for a secured tomorrow.

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