Will restructuring affect credit score?

Answer

A:

Yes, loan restructuring can affect your credit score, but the extent depends on several factors and how the restructuring is reported by the lender. Here’s a detailed explanation:

---

1. How Restructuring is Reported

• When you restructure a loan, the lender reports this to credit bureaus (like CIBIL) with special remarks such as "Restructured Account" or "Rescheduled Account."

• This indicates that you had difficulty repaying under original terms but an alternative plan was arranged.

---

2. Impact on Credit Score

• Negative Impact: Restructured loans are considered a sign of financial stress, so they typically lower your credit score compared to a standard performing loan.

• Less Severe than Default: While restructuring impacts your score, it is usually less damaging than a default or non-payment.

• Improvement Over Time: If you follow the restructured payment schedule diligently, your credit score can gradually improve.

---

3. Long-Term Effect

• Restructuring stays on your credit report for a few years (commonly up to 2-3 years), depending on credit bureau policies.

• Consistent repayment after restructuring can help rebuild your creditworthiness.

---

4. What You Can Do

• Communicate openly with your lender to avoid defaults.

• Make timely payments as per the new schedule.

• Monitor your credit report regularly for accurate reporting.

---

5. How Legal365 Can Help

• Advise you on the implications of restructuring on your credit.

• Assist in negotiating the best possible restructuring terms.

• Guide you on credit repair and monitoring post-restructuring.

---

Want Expert Advice on Loan Restructuring?

 Visit: www.legals365.com
 Call: +91 9625961599

Advocate B.K. Singh and the Legal365 team are here to help you protect your credit and financial future.

.