What is DPD?
DPD stands for Days Past Due and indicates the number of days a payment is overdue on a credit account. It reflects your payment history in credit reports, with higher DPD numbers signaling delayed payments, which can negatively impact your credit score and borrowing eligibility.
What is the Full Form of DPD?
The full form of DPD is “Days Past Due.” DPD is a metric used in credit reports to indicate the number of days a payment is overdue. It shows how late you are in paying your credit card bills, loan EMIs, or other debts. DPD is a critical component in assessing a borrower’s creditworthiness.
For each credit account, your CIBIL report displays a month-wise DPD figure, reflecting the number of days by which a payment was delayed. For instance, if the report shows “30” under DPD, it means the payment was 30 days late. A DPD of “0” signifies timely payments.
Higher DPD figures, such as 60 or 90, indicate severe delays and negatively impact your credit score, making it harder to obtain loans or credit in the future. Managing your DPD by ensuring timely payments is crucial for maintaining a healthy credit profile.
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What are Days Past Due in CIBIL Reports?
As mentioned above, Days Past Due (DPD) in CIBIL reports refers to the number of days a borrower has delayed a payment past the due date. It plays a crucial role in determining your credit score and assessing your creditworthiness.
DPD Meaning in Banking
In banking, DPD measures the delay in payment beyond the due date. For example, if a loan payment is due on the 5th of the month and is paid on the 15th, the DPD is 10 days. DPD categories, such as 1-30, 31-60, and 61-90 days, help banks evaluate the risk associated with lending to an individual. Higher DPD reflects higher risk and can affect interest rates and loan approval chances.
DPD Example
Consider Mr. ABC, who has taken a personal loan from XYZ Bank with a monthly EMI due on the 15th of each month. Unfortunately, ABC’s bank account, from which the EMI is deducted, did not have sufficient funds on the due date, resulting in a bounced payment. XYZ Bank notifies ABC about the missed payment through emails and SMS and also imposes a penalty for the delay.
ABC manages to transfer the required funds and settles the EMI on the 22nd of the month. The 7-day delay between the original due date and the actual payment date is recorded as a Days Past Due (DPD) of 7 days. This 7-day difference is critical as it reflects a delay in payment, which can impact Priya’s credit profile and may affect her future borrowing potential.
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What are the Types of Days Past Due (DPD)?
Days Past Due (DPD) is categorized based on the number of days a payment is overdue. These categories help lenders assess the severity of late payments. The main types of DPD are:
| DPD Value | Meaning | Impact on Credit Score |
| XXX | All payments have been made on timeThe bank’s failure to update the payment | Positive |
| 000 | No outstanding payment is left for the loan or credit card | Positive |
| STD(Standard ) | Dues are less than 90 days | Negative |
| SUB(Sub-Standard) | The account was NPA for less than 12 months | Worse |
| DBT(Doubtful) | The account was NPA for 12 months | Worse |
| LSS(Loan Settled Short) | Settling for less than owed indicates financial distress | Worse |
How Does DPD in Credit Report Impact Your Education Loan?
When applying for an education loan, lenders thoroughly assess your credit history, including the Days Past Due (DPD) in your credit report. DPD indicates the number of days a payment is overdue.
A negative DPD, reflecting delayed or missed payments, can affect your chances of securing an education loan or result in less favorable terms. Understanding how different DPD levels impact your credit profile is crucial for maintaining a good credit standing and increasing your eligibility for an education loan.
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30 Days Past Due on Credit Report
A DPD of 30 days means you missed a payment by a month. While this is a minor delay, it still raises red flags for lenders. For education loans, a 30-day DPD could lead to stricter scrutiny of your financial habits. Although it might not immediately disqualify you, lenders may offer less favorable terms like higher interest rates or ask for additional documentation. Repeated instances of 30 days past due suggest inconsistent financial management, which can affect your loan approval chances.
60 Days Past Due on Credit Report
A DPD of 60 days is a more serious issue and indicates that you’ve missed payments for two consecutive months. This level of delinquency significantly lowers your credit score and makes lenders hesitant to approve your education loan. A 60-day DPD suggests high risk, leading to possible loan rejection or very stringent terms if approved. Lenders may also ask for a guarantor or collateral to mitigate the risk, which can add complications to the loan process
How to Avoid Negative DPD in Credit Reports?
A negative DPD impacts your ability to avail yourself of any future loans. Hence, it is vital to understand how to avoid any negative DPD in your credit reports. To avoid negative Days Past Due (DPD) in your credit reports:
- Ensure all credit card bills and loan EMIs are paid by the due date.
- Use SMS, email alerts, or apps to remind you of upcoming due dates.
- Enable auto-debit for recurring payments to avoid missing deadlines.
- Maintain a budget to manage expenses and ensure timely payments.
- If facing financial difficulties, discuss revised payment terms with your lender instead of missing payments.
- Identify and correct errors that could reflect an incorrect DPD.
How to Calculate Days Past Due in Banking?
DPD is calculated based on the due date of your payment and the date on which it is actually made. Here’s a breakdown of the calculation:
Due Date: The date by which you are supposed to make the payment as per the terms of your loan or credit card agreement.
Actual Payment Date: The date on which you actually make the payment.
The difference between these two dates determines the number of days past due. For instance, if your payment was due on the 5th of the month and you paid it on the 15th, the DPD would be 10 days.
How to Find Days Past Due in the CIBIL Report?
Checking your DPD is straightforward if you have access to your CIBIL report. Here’s how you can do it:
- Obtain your CIBIL Report from the CIBIL website or through other authorized portals like ET Money, WishFin, etc, Paytm, etc
- Check the credit or loan accounts
- Go through the ‘Payment History’ section
- DPD will be mentioned separately for each credit account.
- Each credit account shows a month-by-month DPD.
- Look for numbers like “0,” “30,” “60,” etc., indicating the number of days you were late on payments. “0” means on-time payment.
How to Improve Your DPD?
Managing and improving your DPD is essential for maintaining a healthy credit profile. Here are some strategies to help you stay on top of your payments:
- Make Timely Payments
Always ensure that all payments are made well within the due date and that any outstanding dues are cleared within 90 days. Consider setting up automatic payments for your bills to ensure they are paid on time each month. This can help you avoid missing due dates and accumulating DPD.
- Maintain a Credit Utilization Ratio
Try to utilize only a part of your allocated credit limit as it will help in maintaining a robust credit utilization ratio(CUR). Ideally, CUR should remain below 30%
- Review Credit Report: errors
Regularly check your credit report to catch any inaccuracies or discrepancies early on. If you find errors, dispute them with the credit bureau to ensure your DPD reflects your true payment history.
- Active Credit Accounts
Your active accounts demonstrate your financial discipline. Always try to sustain positive activity in such accounts as lenders prefer well-managed accounts. These accounts act as evidence of your dedication to responsibly paying
- Maintain a Good Credit History
Your creditworthiness is directly related to your credit history. Ensure to maintain a good credit history by making timely payments, managing proper credit utilization, and maintaining a strong financial standing.
Conclusion
Understanding and managing your Days Past Due (DPD) is crucial for maintaining a healthy credit profile. DPD is a key indicator of your payment history and directly impacts your credit score, loan eligibility, and overall financial health. By staying on top of your payments, setting up reminders, and regularly reviewing your credit report, you can effectively manage your DPD and work towards improving your credit standing.
FAQ Days Past Due
What are the Days Past Due in the CIBIL report?
It indicates the number of days a payment is overdue, reflecting how late a borrower is in making payments on a credit account.
What is the full form of DPD in Finance?
The full form of DPD is days past due. It is reported monthly in the CIBIL report and impacts it directly.
How do you remove DPD from a credit report?
DPD can not be removed from a credit report since it is reflected in the history for the last 36 months.
How to improve your credit score with DPD?
There are multiple ways to improve your credit score with DPD including timely repayments, low credit card use, and a decrease in the number of inquiries.
What if DPD in CIBIL is marked incorrectly?
If a DPD (Days Past Due) in your CIBIL report is marked incorrectly, you should raise a dispute with CIBIL to correct the information. It is advisable to clearly mention your loan account number, name of the lender, payment details, etc.
How is Days Past Due(DPD full form) Calculated?
Days Past Due (DPD) is calculated by subtracting the due date from the current date to determine how many days a payment is overdue i.e. Payment Date – Due Date
Why is Days Past Due(DPD) in CIBIL important?
Days Past Due (DPD) in CIBIL is important because it reflects the number of days a borrower has delayed repaying a loan. It impacts credit scores and indicates the borrower’s creditworthiness to lenders.
