First, you need to obtain a copy of your credit report and study it to see what your credit problems are.
How much does credit repair cost?
You can repair your credit absolutely free if you do it yourself! However, many people choose to get professional help in rebuilding their credit health either because
1) they do not have the time to do it themselves or
2) the credit issues are too serious or complex and require expert help to resolve.
If you choose outside help, the cost is usually a few thousand rupees depending on the seriousness of the issues involved. When choosing someone to help repair credit in India, it is important that you identify a company that does not offer an instant increase in your credit score. Sometimes, some unscrupulous companies who claim to repair credit immediately, can indulge in fraud to instantly raise your credit score. While this might get you a loan in the short term, you will face long term, irreversible damage to your credit when the fraud is detected by the authorities.
How can I repair my credit on my own?
First, you need to obtain a copy of your credit report and study it to see what your credit problems are. Below are some of the more common issues involving credit repair in India and how you could go about resolving them on your own:
1. Administrative/reporting errors: If you identify any mistaken entries that are dragging down your score for no fault of yours, you need to report it to the credit bureau immediately and file a dispute. In India, the 3 credit bureaus that issue credit reports are CIBIL, Equifax and Experian.
2. Large number of missed or delayed payments: Making all your payments in time and in full will significantly help increase your score.
3. High credit utilization rate: If you spend more than 30% of your total credit limit on your credit card, it signals that you are hungry for credit. This will cause your score to drop. You will need to work on reducing your monthly expenses and bringing down your credit utilization rate.
4. Large number of credit accounts: If you have numerous loans and credit cards accounts, it implies that you have insufficient credit and need to tap multiple sources to fulfill your financial obligations. If this is an issue for you, you will need to optimise the number of credit accounts so that you have a healthier credit profile.
If you do not have the time to undertake these steps, or if the credit report seems too technical, it is simple to sign up for professional help. CreditMantri can help you obtain a free credit report, analyse the contents, suggest specific actionable steps on how you can rebuild your credit health, and execute those steps for you as well.