What is the Days Past Due (DPD) in the CIBIL Report?

Understanding credit scores can feel like walking a tightrope, where even the smallest misstep can mean the difference between loan approval and rejection. One of the most critical elements of this high-stakes journey is the Days Past Due (DPD) in your CIBIL report.

Days Past Due?? 🤔

We get it! This term often raises eyebrows and questions.

Understanding DPD may seem difficult at first, but it's important for anyone looking to maintain or improve their creditworthiness. In this article, we'll explain what Days Past Due means, why it's important, and how to calculate it. 

Coverings-

• What is Days Past Due?
• Understanding DPD in CIBIL Reports
• How is DPD Calculated?
• Ways to Report Dispute of DPD Errors
• How to Improve Your DPD?

What are Days Past Due in the Cibil Report?

Days Past Due (DPD) is a crucial metric in your CIBIL report that serves as a window into your credit payment history. It represents the number of days a payment on your loan EMI or credit card bill has been overdue. In simpler terms, it reflects how promptly you settle your credit obligations.

Understanding  Days Past Due in CIBIL Reports

• Function: DPD acts as a benchmark for lenders to assess your creditworthiness. A lower DPD indicates a history of making timely repayments and strengthens your credit profile. Conversely, a higher DPD suggests a tendency to delay payments, which can negatively impact your credit score.
• Representation: The CIBIL report displays the DPD for each month over the past 36 months, providing a comprehensive overview of your recent credit repayment behaviour.
• Values:
  • "000" or "XXX" - These notations signify that you made all your payments on or before the due date during that particular month.
  • Specific number (e.g., 30) - This value represents the exact number of days your payment was overdue in that month. For example, a DPD of 30 indicates your payment was 30 days past the due date.

Generally, any DPD exceeding 30 days is considered negative and can significantly reduce your credit score. The severity of the impact depends on the extent of the delay and whether it's an isolated incident or a recurring pattern.

If you want to know how to build your credit score, click on the link to read about it.

How is Days Past Due Calculated?

DPD is calculated using a simple formula:

DPD = Payment Date - Due Date

Here's how it works:

• Identify Due Date: Find the date your loan EMI or credit card bill payment is officially due. This information is usually clearly stated on your loan agreement, credit card statement, or any other relevant financial contract.
• Record Payment Date:  This is the date you actually make the payment.
• Calculate DPD: Subtract the due date from the payment date. The resulting number is your DPD.

For example, if your credit card bill is due on the 15th of the month and you pay it on the 17th, your DPD would be 2 (17 - 15 = 2).

Important Points:

1. DPD is calculated based on calendar days, not business days. So, even a one-day delay after the due date counts towards your DPD.
2. Credit bureaus might categorise DPD into different ranges (e.g., 30-60 days past due) to assess the severity of the delinquency.

Ways to Report Dispute of Days Past Due Errors

If you discover a discrepancy in your credit report regarding DPD, you can take the following steps to challenge it:

1. Reporting to the Credit Bureau:

In India, the credit bureau you'll likely be dealing with is CIBIL (TransUnion CIBIL). They offer options to dispute errors online or offline.

When filing the dispute, be prepared to provide:

• Specific details about the error, including the account and the date of the supposed missed payment.
• Proof of your on-time payment, such as bank statements or payment receipts.

2. Dispute Resolution Process:

• Once you file the dispute, CIBIL will contact the lender who provided the information.
• CIBIL will mark the disputed information as "Under Dispute" in your report.
• The lender will investigate the claim and respond to CIBIL with corrected information if the error is verified.
• CIBIL will update your report with the corrected information and remove the "Under Dispute" tag.
• You'll receive an updated credit report reflecting the changes.

3. Additional Tips:

• Keep copies of all communication related to the dispute for your records.
• Be patient, as the dispute resolution process might take some time.

How to Improve Your Days Past Due?

1. Pay on Time Going Forward: This is crucial. Make all future payments for credit cards, EMIs, and loans before the due date.

2. Prioritise and Budget: Create a budget to understand your income and expenses. This will help you prioritise bills and ensure timely payments.

3. Set Up Reminders: Use SMS alerts, email notifications, or financial apps to set payment reminders and avoid missing due dates.

4. Catch Up on Overdue Payments:  If you have any past-due accounts, clear them as soon as possible. Timely payments moving forward will positively impact your credit score over time.

5. Dispute Errors (if any): Regularly review your credit report for inaccuracies. If you find errors regarding DPD, dispute them with the credit bureau to rectify your report.

Additional Tips:

1. Maintain a low credit utilisation ratio. This means only using a portion of your available credit limit.
2. Keep your credit accounts active, demonstrating consistent financial management.

Remember, building a good credit history takes time. By consistently following these steps, you can improve your Days Past Due and credit score in the long run.

Conclusion

In conclusion, DPD doesn't just reflect your past behaviour with credit but also significantly influences how future lenders view your reliability. To safeguard your credit score, it is crucial to pay attention to DPD, promptly address any discrepancies via CIBIL's dispute resolution process, and adopt strategic financial practices to prevent payment delays. 

Remember, each day counts when it comes to Days Past Due, and staying informed is the first step towards achieving and maintaining a healthy credit score.