A Credit Score is a 3 digit number, derived from a person’s credit history. This number represents the creditworthiness of the person and is calculated based on information collected by credit bureaus from lending institutions. There are primarily 4 credit bureaus in India who are associated with different lending institutions. The credit score in India is marked between 300 – 900. Generally, a score of 700 – 750 is considered good. 

This credit score is important because lenders like banks and financial institutions consider this credit score while processing your loan application or any other form of credit application to determine your credibility and repayment capacity. Hence, an individual is ought to be abreast with their credit report and take all efforts to maintain a healthy score. 

And, when you find that your credit score is bad or going down for some reason, you can restore it by following few simple tactics and it is called Credit Restoration. 

What is Credit restoration?

Credit Restoration is a way to repair your credit history to improve your overall credit score. Your credit score is based on a number of variables and making a few changes to your debt management strategy can fix it. So, let’s start!

In order to understand why you have a bad credit score, you need to first learn what goes in to make up your credit score. A credit score is basically your debt management prowess. The following factors decide your credit score – 

  • Payment history

  • Credit utilization

  • Length of credit history

  • Mix of credit types

  • Recent applications

So, improving these above parameters is the key to restoring your credit and this article elaborates a few simple DIY steps for Credit Restoration. 

Steps for Credit restoration

  1. Understand your credit report: This is an important step in the process. Get your latest credit report and read it thoroughly to understand where you stand. There are 4 credit bureaus in India and an individual is entitled to one free report from each bureau in a year. Get all 4 credit reports and analyse it to understand where you are going wrong so that you can fix it. 

  2. File for dispute resolutions if you find any errors on the reports: Errors are not common but they do happen. Individuals have found duplicate line items or a missing payment that has affected their credit score. If you find such errors, you can contact the respective bureau to get them fixed. The bureau is bound to fix the errors and update your report in 30 days. 

  3. Tweak your debt management strategy: Now that you have taken care of any errors from the bureaus’ side, it is time to look at your financial management. Time to open that excel sheet and start noting down all your expenses. There are apps available to help you with your budgeting that can give you a sense of where all that money is bleeding out. Take determined steps to manage your expenses to pay off your bills on time. Make sure that your bills are first priority and the rest can take a back seat. 

  4. Stick to your budget plan: You might have created a wonderful budget plan on that phone app and it all looks easy and doable. The challenge is to stick to the plan. Continue healthy habits of paying bills on time every month. Paying bills on time creates a good repayment history which is important for your credit score. 

  5. Pay off those high interest debts: Though a vacation sounds good after all those office hours, that bonus money is better off paying that credit card debt incurring high interest. Whenever you come across some extra money in the way of incentive or bonus, use it to pay off some of the high interest debts. That will free up some credit limit on your credit card and improve your credit utilization ratio. A healthy credit utilization ratio greatly improves your credit score. 

  6. Don’t apply for a new credit: Each time you apply for a credit, be it credit card or a loan, it is mentioned on your credit report as a ‘hard enquiry’. You cannot have too many hard inquiries on your credit report because that affects your credit score. Our primary aim to restore our credit and applying for additional credit may not help. Wait for some time before you apply for new credit


Credit Restoration Services From Professionals

If you are too overwhelmed or feel complicated by the above DIY method, you may seek professional assistance. There are organizations like CreditMantri that can help you restore your credit. You can get the following services from a professional service like CreditMantri –

  • Coordinate with the lender – CreditMantri will coordinate on your behalf with the lender to resolve the problems. You'd be contacted at each stage of the process

  • Best Repayment Terms - They will get you the best repayment terms from the lender 

  • EMI Options – They will also get you an attractive EMI option with the lender 

  • Credit Score Update - They will ensure that your negative accounts have a clean closure and would follow up with the bureau to get your Credit Score updated 

End note:

Whether you choose to repair your credit yourself or with the help of a professional, understand that it is a slow and continuous process and does not happen overnight. Hard work and determination is the key and both have to come from you. Conscious effort should be put in to your debt management not just to improve your credit score but in general for a healthy financial future for yourself. Credit score has become an essential accessory in the financial world and cannot be taken lightly if you have plans for taking out a few loans in your near future. Be prudent with your money and fix that credit score now!


1. Can credit score be affected by a delay in paying credit card dues?

Yes. Credit score will be negatively impacted due to non-payment or delay of credit card dues. So, make sure to settle your credit card bill and loan EMIs on time. 

2. What is the credit utilization ratio?

The ratio of the actual credit usage to the total credit limit available is the credit utilization ratio. Most experts believe the credit utilization ratio should be a maximum of 30% of the total credit limit to build a good credit score. 

3. Is it advisable to apply for credit through multiple lenders?

No. Applying for credit through multiple lenders will negatively affect the credit score of the applicant which in turn will reduce the chances of availing credit at the time of need.