DPD in CIBIL Report: Meaning & Impact on Credit Score

Summary

• Days Past Due (DPD) in a CIBIL report refers to the number of days a borrower delays in making payments for loans, EMIs, or credit card bills.
• A higher DPD indicates late payments and negatively affects the credit score, making it harder to get loans or credit cards.
• To avoid a high DPD, individuals should make timely payments, maintain a budget, set up automatic payments, and regularly monitor their credit report.

Your CIBIL report plays a crucial role in determining your creditworthiness. It provides detailed insights into your financial history, helping lenders assess your ability to repay loans or credit. One key aspect that can significantly affect your credit score is the Days Past Due (DPD). In this blog, we will explore what DPD means, how it impacts your credit score, and the steps you can take to avoid negative consequences.

What is Days Past Due (DPD)?

Days Past Due (DPD) is a term used to track how late a borrower is in making payments towards their debt. It measures the number of days that have passed since the due date for a payment, such as an EMI (Equated Monthly Instalment), credit card bill, or loan repayment.

The DPD value is critical in assessing your payment behaviour and helps credit bureaus like CIBIL assess your repayment behaviour and credit discipline. A higher DPD number indicates that you have missed payments or made late payments, which can negatively affect your credit score.

How is DPD Calculated?

DPD is calculated based on the number of days a payment is overdue. The payment status is divided into categories, usually starting from the first day after the payment due date:

• DPD 000 (or STD): The payment is made on time with no delay.
• DPD 30: The payment is 30 days overdue.
• DPD 60: The payment is 60 days overdue.
• DPD 90: The payment is 90 days overdue, and so on.

Each missed payment or delayed repayment contributes to a higher DPD, which ultimately affects your CIBIL score. In CIBIL reports, DPD may also be shown using codes such as “STD” (standard), “SMA” (special mention account), or “SUB/Doubtful/Loss” depending on the severity of delay. A DPD of 30 days indicates a payment delay, but it can be manageable. However, if your DPD reaches 90 days or more, it becomes a serious red flag for lenders, reflecting an ongoing payment issue.

Also Read: What is mean by Demand Draft?

What Does DPD Mean in a CIBIL Report and How Does It Impact Your Credit Score?

In your CIBIL report, DPD serves as an indicator of your payment behaviour. It significantly influences your credit score through your payment history, which is a number that represents your overall creditworthiness. Lenders and financial institutions rely on this score when deciding whether to approve loans or credit card applications.

• Payment History: It shows how consistently you make payments on time. Any history of overdue payments, late fees, or defaults will be recorded in the DPD section.
• Risk Assessment: A higher DPD, especially 60 days or more, can make you appear risky to lenders.
• Credit Score: A DPD of 30 days or more may lead to a dip in your credit score.

Impact of High DPD on Credit Score

The impact of high DPD on your credit score cannot be understated. Your credit score is a key factor in determining loan eligibility, interest rates, and credit card offers. A high DPD indicates a lack of timely payments, which lowers your credit score.

• A DPD of 30 days can cause a slight drop in your score.
• A DPD of 60 to 90 days can cause a more significant drop.
• A DPD of 90 days or more is treated as a serious delinquency and may lead to the account being classified as a non-performing asset (NPA).

Lenders and banks are likely to perceive individuals with a high DPD as high-risk borrowers, which may lead to rejections of loan or credit applications.

How to Avoid a High DPD in Your CIBIL Report

Maintaining a healthy CIBIL report is essential for your financial well-being. To avoid a high DPD and keep your credit score intact, here are a few steps you can follow:

• Set Up Automatic Payments: Automate your bill payments to ensure they are made on time. This is particularly helpful for loan EMIs and credit card bills, reducing the chances of missing a due date.
• Maintain a Budget: Regularly track your expenses and ensure you have enough funds to cover your bills. Having a budget helps you stay on top of your payments and avoid late fees.
• Prioritize Debt Payments: If you're facing financial challenges, prioritize essential payments, like loan installments and credit card bills, to avoid overdue payments.
• Communicate with Your Lender: If you're unable to make a payment on time, reach out to your lender or bank. They may offer options like rescheduling the payment or offering temporary relief in case of financial hardship.
• Monitor Your CIBIL Report: Regularly check your CIBIL report for any discrepancies and to track your DPD status. Early intervention can help you resolve issues before they become significant problems.

Conclusion

Days Past Due (DPD) is a critical aspect of your CIBIL report, reflecting your payment history and behaviour. A high DPD can significantly affect your credit score, making it harder to secure loans or credit. By understanding how DPD works and taking steps to avoid delays, you can maintain a positive financial track record and improve your creditworthiness.

To ensure that your CIBIL report remains in top shape, always prioritize timely payments and stay informed about your financial obligations. By doing so, you'll avoid the negative impacts of high DPD and keep your credit score healthy.

For more tips on managing your CIBIL report and improving your credit score, visit Bank of Baroda's Financial Services. Take charge of your financial future today!