In today's time, the need for credit is very imperative. If you have defaulted on your payments for any reason, your credit information report will promptly report it. With a bad credit report, you are unlikely to get any loan or credit card from any bank. However, that does not mean you are scarred for life.
Rebuilding your CIBIL score is a slow process. Follow these simple steps to help to improve your credit score.
Pay off existing debts. The most effective way to improve your credit score in this area is by paying down your revolving (credit cards) debt. In fact, owing the same amount but having fewer open accounts may lower your score.
Opt for a secured for a secured credit card, which is usually given against the security of your fixed deposits. ICICI Bank, HDFC Bank and Axis Bank are three banks that issue secured credit cards in India.
Go for a Consumer Loan (T.V, Refrigerator, other Home needs) by providing PDC as security and repay the entire loan tenor without any delays.
Go for a personal loan using an asset as collateral or as a unsecure loan. Paying dues towards this loan on time for the next 12-24 months will help revive your credit history.
Don't make too many inquiries for more credit cards and loans. Also, abstain from taking huge loans until your score has improved and you are financially healthy.
Usually, CIBIL maintains your credit history for 7 years but displays month-by-month repayment record for the last 36 months. This essentially means that if you are on a clean slate post repayment of your old debts, and promptly pay your new dues and loans, your credit history will start looking up after three years.
Note: Courtesy from CreditVidya.com