Tuesday, 19 January 2016

Paid off dues to collection agency. Know the next steps

It is quite easy to access credit these days, with a lot of lenders wanting to get good creditworthy customers who borrow and repay money on time. So if you have been making a continual attempt to improve CIBIL score, there is no going to no dearth of options when you need to access credit. But at times in life, because of an unforeseen situation, you may not be able to repay your debt on schedule.
This is when, a lender may send a collection agency representative or a collection agent who may come to your home or office to collect your dues. You may work hard and rustle up the money to re-pay the collection agency, because you are already under stress and are feeling immensely guilty about the fact that you have not been able to meet your repayment commitments on time, but just paying off your dues to a collection agency is not enough. You need to further pursue too see that your dues have been settled and ensure that you have your chance to increase CIBIL score. Here is a step by step guide about what needs to be done after your dues have been paid off:
Keep a proof of the settlement of your dues
If a collection agent has been sent to your place to collect your dues, do not be so overcome by guilt that you forget to do the needful. First up, do not agree to pay him unless he is carrying some identification and is not ready to give you a written document stating that your dues have been cleared. You should save this document safely to ensure that you can furnish it at a later date if anything goes amiss. There have been cases when a borrower has settled his dues with one collection agency, only to be contacted by another agency later, at which point of time he discovered that the previous agency was a fraud.  
Ensure that your payment has gone through
Your responsibilities do not end, once you have handed over your cheque to the collection agency. You must make a note of your cheque number and ensure that the cheque has been cleared by your bank. If you have made a debit card or an online transaction, ensure that you check your savings account to see that the payment has gone through and your account has been debited accordingly. If necessary, make a call to your lender (with whom you have settled your dues) to be doubly sure that your payment has gone through and that you have no outstanding dues.
Check you CIBIL report
Your CIBIL score will have gone down, because of non-payment of your dues on time, but the good news is your CIBIL score is not etched in stone, and your efforts to improve your CIBIL score will show up after you have paid off your dues. Don’t however check your CIBIL score immediately as it is not possible to increase CIBIL score overnight, and the efforts you have made to repay your dues will not reflect immediately. Wait for a month or two, and then pull out your CIBIL score and report. If you still see that the changes are not reflecting on your score, you will have to raise a CIBIL dispute. After raising a dispute, CIBIL will forward your request to the concerned lender who will make the necessary changes and re-send the correct information to CIBIL. Only after the rectified information comes to CIBIL can it make a change in your CIBIL report that will ultimately reflect in you CIBIL score. However, do bear in mind, that this is a time taking process and may take as long as 30 days.
Build a contingency fund
Once you have settled your dues with your lender and brought up your CIBIL score to a satisfactory level, you can heave a sigh of relief. However, the efforts you have made to settle your dues may have proved to you that life can take an unpleasant turn quite unexpectedly and you must be prepared for the worst. In the modern times that we live in today, it is of utmost importance to make an attempt to keep your CIBIL score high and make continual efforts to enhance credit score at all times.
Therefore, if you are servicing debt of any kind, make sure that you build a contingency fund that can take care of your financial commitments including repayment of debt for a period of three to six months. That way, even if life does throw a spanner at you at the time you least expect it, you do not have to worry about your debt repayments on the impact that non-payment will have on your CIBIL score. By building your savings kitty little by little you will realize that it pays to be prepared at times such as these!

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