What is the Full Form of DPD in Banking?
Thе Full Form of DPD in Banking is Days Past Due. The DPD shows how many days have gone by without an EMI or credit card payment. It comprises the last 36 months’ payment history. At the time of assessing your loan application, the lender checks your DPD to find out if you have ever missed a payment. If your DPD is ‘zero’ for all 36 months, it reveals that you have paid off all credit commitments on time and present less risk to the lender. Any late payments that are shown in DPD will be seen by lenders as evidence of your inability to make loan installments.
How is DPD Calculated?
DPD is computed by comparing the actual due date of a credit card or loan EMI with the payment date. To calculate the DPD, calendar days are considered and not business days. Even if a payment is made a day later than the due date, it still counts toward the DPD. A high DPD can lower your credit score. The DPD will be deemed a default if it is more than 30 to 60 days, impacting your credit score.
Correcting Errors in DPD
DPD may sometimes contain errors. For example, we may have paid on time, but the DPP sometimes indicates that a payment was missed. To rectify this, we must file a complaint with the CIBIL, which will then contact the relevant lender requesting verification. Following this, the credit account will have an “under dispute” tag added by CIBIL. Once the CIBIL gets a revised report from the lender, it will modify the data and remove the ‘under dispute’ tag from the account.
