DPD in CIBIL: The Silent Red Flag Every Borrower Should Know About

If you belong to the 277 million Indians who use formal credit facilities, you certainly know that your CIBIL score largely depends on your repayment behaviour. Lenders review this section closely before approving any credit. They examine each credit product to verify the presence of a non-zero DPD in your credit report.

Heard this term for the first time? Let’s understand the meaning of DPD in CIBIL, how it impacts your financial health, and other key details you should be aware of.

Quick Synopsis 

• A DPD entry stays in a CIBIL Report for up to 3 years from the month the payment was missed.
• A low DPD value indicates a good credit profile, whereas a high DPD value demonstrates a less credible borrower.  
• Credit bureaus include a DPD in credit reports; a missing payment by 30 days will be marked '30' DPD value, similarly, a missing payment for 60 days, marked as '60' DPD value.

What is DPD in CIBIL Report?

DPD stands for Days Past Due in CIBIL Report, and shows the number of days a loan or credit card payment is overdue after its due date.

As it demonstrates your creditworthiness, it is considered one of the most crucial components in your CIBIL report. After each credit product, you can find a separate DPD table. In case you can not repay any loan, the DPD remains visible on the report for 3 years.

DPD: What Impact Does It Have on Your Financial Health? 

DPD value offers you a snapshot of your credit payment behaviour. You get to know which credit card or loan EMI payment gets delayed and for how long, indicating potential defaults.

The lower the value, the more financially responsible a borrower is perceived to be in the lender's eyes. On the contrary, a high DPD value is a red flag, indicating delayed payments, which not only lowers credit score but also overall creditworthiness.

How is DPD in CIBIL Report Determined? 

The value of DPD in a credit report is determined and reported by lenders (banks and Non-Banking Financial Companies) to credit bureaus like TransUnion CIBIL, Experian, Equifax, and CRIF High Mark.

Lenders determine it by considering two details: one is the due date of a credit card bill or EMI payment, and the actual date of payment.

Look at the example to understand how DPD is calculated:

Assume your EMI payment date is the 15th of every month. If you pay it on the 18th, your DPD value would be 3. If you pay it on the 20th, the value would be 5. 

Supposedly, if you fail to pay that amount entirely for that month and pay it in the next month, your DPD will be much higher. It totally depends on how long you delayed making that payment.

What is the Frequency of DPD Updation in Your CIBIL Report?

Whenever your lender submits your credit data to the credit information companies (CICs), they update the details in your report. Then they evaluate and determine your credit score.

Even if you miss a payment by 30 days, your credit report will be updated for that month as a '30' DPD value. If you don't make the payment for the next month as well and your lender reports it to the bureau, then you will find the DPD value as '60'.

It is advisable to clear all the due payments within 3 months to maintain a good credit score and overall a good credit profile. 

How to Improve Your Credit Score with a High DPD?

Right after spotting high DPD in CIBIL report, start taking proactive steps to improve your credit score. Those steps can be:

• Make Timely Repayments

Make sure you pay all of your outstanding debts within 90 days and ensure all future payments are made on or before the due date. This should be your first step towards gradually increasing your credit score.

• Keep Credit Utilisation Ratio Low

It is advisable to keep your credit utilisation ratio less than 30%. A higher credit utilisation ratio means your source of income is not stable or sufficient, and you need to rely on credit accounts to meet your requirements.

• Report As Soon As You Spot Errors

You may identify errors on your credit report, such as incorrect DPD entries. In such cases, address the issue as soon as possible. Visit the credit bureau's official website to raise a dispute or contact their customer service team. 

• Keep Your Credit Accounts Active

By keeping well-maintained credit accounts active, you can demonstrate your disciplined financial behaviour to your lender. They consider it as evidence that you are able to repay future bills of credit accounts with the same diligence.

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How is DPD Represented in Your CIBIL Report?

There are either numbers or certain codes that show your repayment status for each month.

Important Terms Used in a CIBIL Report for DPD

As per the regulations set by RBI, lenders should mark DPD values in the following format!

How to Correct Wrong DPD Entries in Your CIBIL Report? 

Upon seeing an incorrect DPD entry, you can raise a dispute using the following steps:

• First, download your latest credit report and minutely check the DPD section.
• Then, note the error, including the lender’s name, account number, the month in which you spot the error, and the incorrect DPD value.
• Go to the official website of any credit bureau, log in, and navigate the ‘Dispute Centre’ to raise a dispute.
• The CICs forward your correction request to your lender for verification. After verification, your lender will share the correction with the credit bureaus.

Final Words 

DPD in CIBIL Report is a critical element guiding your credit journey. Mastering its different codes, terminology and calculation process helps you generate a robust credit profile.

To maintain positive DPD, you just need to take some proactive measures, such as setting up payment alerts and auto-deduction, reviewing your report periodically, communicating with lenders and keeping your credit usage under 30%. This becomes even more important when you plan to apply for a credit card