CIBIL report is a proof of all your financial discipline to banks and financial institutions. The banks and the financial institutions use the CIBIL report for approving your loans or credit card application. If you have a healthy score, then you stand a higher chance to avail a loan or a credit card. It is an indicator of how well you manage your credit.
What is DPD
You must understand the elements of your CIBIL credit report. One of the most crucial element is the ‘DPD’ or Days Past Due. DPD is the information available in the accounts section of your credit report. It shows how you are paying your EMIs and credit card bills and if you have missed any payments. If you have missed any payments, it shows how many days and in which month you have missed your payment.
DPD indicates the days a payment has been delayed for. If there is no ‘XXX’ or ‘000’ then it means that you have missed making a payment. The information recorded is up to the last 36 months of payment history.
If you have taken a loan this year and the payments have started in April 2015. But, you have missed the payments for 3 months, from May 2015, the DPD will show the following in your report:
DPD 090 060 030 000 000
Month/Year 8/15 7/15 6/15 5/15 4/15
What does it mean to have DPD
In the above example, there is a clear indication that you have missed the payments for 90 days that is 3 months. ‘000’ indicates that there were no days past due for that month. It says that you have serviced the loan for that particular month.
If there was ‘XXX’ reported, then it simply means that the bank or the financial institution did not provide any information for that particular month. If in case you have any other information in your report other than ‘000’ or ‘XXX’, which means that you have not been paying the loan or credit card bills on time. This is a red flag and serves as an alert to the credit institutions that you are not capable of servicing your loan well.
What can you do to have a good credit history
To have a good credit history you must ensure that you never miss making any payments on loan or credit card. You have to make the payments on or before the due date across all months till the loan or the credit card bills have been cleared. You must have a healthy credit score to be able to enjoy the benefits that tag along with the good credit history.
Important Elements of DPD Value and What it Signifies
XXX as DPD Value: This is a safe value that implicates the bank or lender's failure to update the data.
000 as DPD Value: This is also a safe value that signifies that there is no outstanding payment left.
STD as DPD Value: This shows that the dues are for <90 days.
Note, that anything that is not XXX or 000 is negative. However, while STD is negative anything else implies worse. Banks also term anything over 90 days due date as NPA or Non-Performing Assets.
SUB as DPD Value: Account that is remained at NPA <12 months
DBT as DPD Value: Account remained at SUB for a duration of 12 months
LSS as DPD Value: Account where loss is identified and do not remain collectible anymore.
Is it Possible to Change DPD values?
In some cases, it has been observed that lenders have rejected applications for loans due to information on the DPD section despite the credit report being very clean. But unfortunately, there is no solution for changing the DPD information for a month on an individual’s CIBIL report.
‘SETTLED or WRITTEN OFF’ statuses can be taken care of with some action. But for DPD, one needs to wait for some time until the DPD section shows stability. Also if you have poor DPD let’s say a year ago, it will be off the data in 2 years’ time.