Second chances don’t come easy. Especially the pressure that comes with making a first impression. We have all heard about first impression make the best impression, if a person makes a mess of that impression it will take immense hard work and time to get into the good graces of people.

It is the same case with banks and NBFCs who lend credit in the form of loans and credit cards. If you default on a loan or pay your dues late it will have an “impression” or impact on your credit score which is the cumulative score based on your credit history. The impression you make in paying your EMI or credit card dues are accumulated and rated on by Credit bureaus working in India. It is from them that banks & NBFCs get details about you the borrower. If the impression you have created is not good, you will find it difficult to get loans and credit cards.

Factors that affect your credit score

  • Payment history – The most important factor. How regular you are on your loan payments
  • Amounts owed – Having very high debts or maxing out credit cards with dues continuing for many months will have a negative impact on your score
  • Length of credit history – The longer the credit history, the higher the credit score
  • Credit mix – With different types of loans available CIBIL™, Equifax, Experian and CRIF High Mark needs a debt to determine your score
  • New credit – Taking out credits within short time increases your credit risk

As you can see payment history is rated high with almost all the credit bureaus. Even a single missed or late payment will have big repercussions on your credit report.

The Second Chance

Though you could have made mistakes in the past as like in the movies (remember Salman Khan in Sultan) you will get a turning point in your life where you can get a second chance to improve your first impression.

This can be done in the form of

1.       Secured loans and credit cards

Secured loans and credit cards are where banks will take collateral from you to provide you with a loan or credit card. The secured loans are – home loans, vehicle loans or loans against deposits, gold loans etc. It might be difficult to get home loans or vehicle loans, but all the other loans are quite possible. Banks will be more lenient with the interest rate here as the risk involved for the bank is less. You will get a loan of 60% to 70% of the collateral value.

Similarly, you can also get secured credit cards which follow the same principles of secured loans. Your credit limit will be 60% to 70% of the collateral pledged. You may think that the benefits of the cards will vary between a secured and unsecured card but that is not the case. In fact, you will get lesser interest than the unsecured credit card.

By paying your loan EMIs or credit card bill on time you will improve your score fast. With a mix of credit, you can improve your credit score even quicker.

2.       App based lending

With the booming of digital technology, many enterprising startups and existing lenders have emerged to provide short term loans based on your salary which is a good way to improve your credit score. These loans tend to have interest rates on the higher side, but it is worth taking if your score is low.


Do not lose hope just because you made a mistake in the past. Your future can be changed for the better if you put in effort and time. You just need to remember one thing, when you do get a second chance don’t mess it up.