Repairing your credit is generally a long process and doesn’t happen overnight. Minor repair in credit may take anywhere between 3 to 6 months and the more serious repairs (such as settled loans) take anwhere between 2 to 3 years.
It’s alright to make mistakes so long as you admit them and make serious efforts to rectify them.
At the outset, one should follow these points before taking any specific action to repair your credit.
Few general suggestions
Slow and gradual process: If you are new to credit, you could start with a secured credit card or a small loan and use it properly.
Professional advice: You could even seek professional help for complex issues such as non performing assets (NPAs), consult a financial advisor or credit counselor.
Stay patient: You should refrain from choosing quick-fix schemes. It is only sustainable changes that yield lasting results.
These are some of the specific steps that you can take to fix your financial past.
Take these specific steps
I. Check your credit report: One of the easiest steps to take is to check your credit report and spot the mistakes (if any). You could check each section and look for any errors so that they can be reported to the credit bureau for incorporating the changes.
II. Credit utilisation: Make sure that your credit usage does not surpass the healthy ratio of 30%. The lower this ratio, the better it is.
III. Pay bills on time: One of the most important metrics of credit score is timely payment of bills and EMIs. If you are making efforts to fix your financial past, make sure that you do not defer bill payment even by a day.
IV. Limit new applications: At the time of repairing your credit, you should make sure that you do not make too many credit applications. These lead to hard inquiries, thereby impacting your score adversely.
V. Healthy credit mix: Last but not the least, credit user should ensure that his credit account is a healthy mix of secured and unsecured credit. Secured credit entails secured credit card, car loan, and unsecured credit includes personal loan & credit card.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
