Days Past Due (DPD) in CIBIL Report

Understanding the consequences of your financial decisions on your creditworthiness is vital, yet it's not always clear during your daily activities. Acquiring knowledge about credit scores and how they are calculated becomes necessary. This is where the significance of a free credit score assessment comes into play. One crucial aspect that lenders pay considerable attention to when evaluating a borrower's credit score, which can be checked for free, is the DPD factor. In this blog, we will explore the DPD meaning in banking, its computation as it relates to the CIBIL Report and its consequential impact on your overall creditworthiness. Understanding the implications of DPD can provide valuable insights into managing your credit effectively.

DPD Full Form >DPD Full Form & Its Meaningamp; Its Meaning

The DPD full form in finance is Days Past Due. It is determined by computing the duration between the scheduled and actual payment dates. The computation of DPD is a crucial component of credit administration. The DPD in CIBIL (Credit Information Bureau India Limited) is a critical determinant of an individual's financial standing.

The banking industry employs the DPD to denote the duration a borrower has not fulfilled their obligation to pay on a loan or credit facility. DPD offers valuable insights into its financial reliability. It assesses borrowers' credit history and repayment behaviour - a crucial metric for lenders.

Format of DPD in CIBIL

The DPD meaning, as used in the context of CIBIL, denotes the temporal duration during which a debtor has deferred the fulfilment of their credit-related responsibilities. Evaluating the risk associated with providing a loan to somebody is a crucial consideration for lenders.

The tabular representation presented below delineates the structural composition of DPD in CIBIL.

DPD Value	0	1-30	30-60	61-90	91-120	121-150	151-180	181+
Month	Current	One month	Two months	Three months	Four months	Five months	Six months	Seven months or more

Important DPD Values and Their Significance

Through the vigilant tracking of DPD, enterprises can effectively guarantee prompt remittances and sustain a solid liquidity position.

• DPD is a quantitative measure employed to assess the duration of time that a payment remains outstanding beyond its due date.

• Assessing creditworthiness for a borrower or a company is a crucial task wherein the DPD values hold significant importance.

• As the DPD value increases, the likelihood of default proportionally escalates.

• DPD values are utilised by financial institutions, including NBFCs, to ascertain the loan amounts and interest rates they extend to borrowers.

• The use of DPD values is not limited to credit bureaus alone, as enterprises can also leverage this metric to oversee their accounts receivable and guarantee prompt remittances from their clientele.

Why is DPD Significant?

Understanding the impact of DPD on loans holds paramount importance for borrowers, as it profoundly impacts their credit score and total fiscal well-being.

Presented herein is a brief exposition of the significance of DPD.

Context	What is DPD?	How is DPD calculated?	Importance of DPD to lenders	Importance of DPD to borrowers
Description	DPD is a metric that indicates the duration of time a debtor has exceeded the deadline for remitting their payment.	The DPD metric is derived by calculating the temporal disparity between the scheduled payment deadline and the actual payment execution.	DPD facilitates the evaluation of borrowing capacity and the reduction of default risk for lenders.	The DPD has a consequential impact on the borrower's creditworthiness and holistic fiscal well-being.

 

How to Report DPD Errors in Your CIBIL Report?

If one has observed inaccuracies in their CIBIL report about their DPD classification, it is essential to undertake remedial measures to rectify them.

The following is a step-by-step method for computing errors DPD in CIBIL.

• Get a copy of your CIBIL report via the authorised website.

• Verify the current condition of each account delineated in the report for DPD.

• If any inaccuracies are detected, such as an erroneous DPD status, it is advisable to note those discrepancies.

• Liaise with the customer service division of the credit bureau and apprise them of the inaccuracies.

• Furnish the requisite particulars and accompanying paperwork to substantiate your assertion. 

• Pursuing further communication with the credit bureau is imperative to ascertain that the rectification has been duly executed.

Conclusion

The Days Past Due (DPD) metric is pivotal in assessing one's creditworthiness and the resulting credit score. The credit report reflects your payment conduct and how much you have deferred your payments. As the DPD in loans increases, there is a corresponding escalation in its harmful effects on one's creditworthiness.

Consequently, upholding a diminished DPD and guaranteeing punctual remittances is imperative to circumvent any adverse implications on your credit profile. Regularly monitoring your credit report and keeping a low number of DPD can enhance your credit score and augment the likelihood of obtaining a loan from top lending institutions like Hero FinCorp.

Thus, be mindful and accountable for your credit conduct to uphold a good credit score. Also, if needed, consult a professional to discuss how to maintain a decent credit score- it will help you stay informed and make informed decisions.

FAQs

1. How is DPD calculated?

The word DPD stands for Days Past Due and is derived from quantifying the duration a debtor has deferred remittance of funds owed. Credit bureaus employ this particular metric as a means of assessing an individual's creditworthiness.

2. How can I remove DPD from CIBIL?

Eliminating DPD from one's CIBIL report is not viable as it constitutes an integral component of the individual's credit dossier. You can enhance your credit score by ensuring punctual payments and reducing outstanding debts.

3. What is the DPD standard?

DPD standard is the grace period for late payments that won't impact a borrower's credit score. DPD is typically 30 days but may differ based on the lending institution or credit bureau.