Impact of One Time Settlement Scheme (OTS) on CIBIL

One Time Settlement Scheme (OTS) and  CIBIL Score  – What would be the impact of One Time Settlement Scheme (OTS) on borrowers credit history ? Do they may apply for the fresh loan ? Can fresh loan be provided to such person who already had accepted the OTS proposal on default of loan ?

As Per BCSBI Ruling : Just as all information about credit availed (amount availed, payments, defaults etc) is reported to Credit Information Companies (CICs) like CIBIL , the fact that the borrower has closed a loan account after accepting an OTS is also reported to CICs.

The bank is required to explain to the borrower the consequences of accepting an OTS on his / her credit history/ credit rating in the records of the CIC.

As lenders check a potential borrower’s credit history / score, defaults in payment or accepting an OTS may affect his chances of getting credit in future.


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