Nowadays, a credit report is not an alien concept for the borrowers. However, there are different terms present in a credit report making a borrower difficult to understand.

Here are few credit report jargons which are commonly used in the report:

1. Written-Off (WO) 

When a bank provides a loan to any borrower, it expects the individual to repay the loan on-time. The objective of the bank is to recover the amount. A bank marks the account as Written-off(WO) if the bank fails to recover the dues. Since any bank cannot retain the NPA’s in their books of accounts and not carry forward, these accounts are written-off. The written-off status is subdivided into Written-off(Total) and Written-off(Principal).

2. Settled

A settled entry in a credit report shows that the amount due on that credit account was not paid in full, but was settled. For example, if you default a credit card payment of ₹30,000, the bank will charge penalties and interest on the amount defaulted. Now, let’s assume the total balance due becomes ₹1,00,000 and the individual is unwilling to pay the full amount, the bank will try to make a settlement. The bank would at least want the principal amount due and cost. For this, the bank would ask to settle the amount, for example, pay around ₹45,000.

In short, the settled entry is present in the report if you have not paid the due amount in full.

3. Post (WO) Settled

The entry of Post (WO) Settled is similar to Written-off except the settlement was done after the amount was written-off. In simple words, the bank has already written off the amount and the individual approached the bank post that.

4. Suit filed/Wilful Default

The wilful default is an entry in the credit report when the individual has the ‘capability to repay the loan but intentionally defaults it. The recent example of wilful default is the case of Vijay Mallya. If a person wilfully defaults the loan, the bank will report one of the following statuses:

• Blank means no suit filed
• Suit Filed
• Wilful default
• Suit filed(Wilful Default)
  

5. Account sold/Purchased

Banks sell the NPA accounts to ARC (Asset Reconstruction Company) or collection agencies. These accounts are shown as account sold or account purchased as the case may be. However, the defaulters are not able to find out the mother account if it is exchanged multiple times.

6. Ownership type

The ownership type in a credit report can vary in the following ways:

• Single: The individual is the sole person responsible for the dues against loan account.
• Joint: Just like in home loan where there can be two borrowers, in a credit report the ownership of a loan can be between two or more borrowers.
• Authorized user: An authorized user is someone who is authorized to pull the credit report.
• Guarantor: A guarantor is a person who promises to repay the loan in case the original borrower defaults.
  

7. Loan Restructured

Loan restructured is when an individual is unable to pay the loan due to an emergency situation like job loss, company loss and such. In such cases, the bank might consider restructuring the loan at revised terms of service. The key objective is to reduce the EMIs to avoid default. The changes are accordingly updated in the credit report.

The above-mentioned terms if marked on your credit report is considered before your credit score is calculated.

These are a few credit card terms used on the credit report. If in case you find few terms difficult to understand after you check your free credit report online, you can our experts by commenting below.