How to rebuild your Credit Score?

Rebuilding your credit score is a vital step towards achieving financial stability. A good credit score can help you secure better interest rates on loans and Credit Cards and achieve significant savings in the long run.

1. Review your credit report

Understand where you currently stand. Start by accessing free credit reports, which can be obtained online. Carefully examine each report for errors or suspicious activities. If you spot any inaccuracies, it's important to get them corrected promptly, as they can negatively impact your credit score.

2. Pay your bills on time

Your payment history is a significant factor in your credit score. Timely bill payment is crucial, so setting reminders or arranging automatic payments can help ensure you never miss a due date. Prioritising payments by focusing on clearing past-due bills first can minimise negative impacts on your credit score.

3. Manage credit utilisation

Keeping your credit utilisation ratio low is beneficial for your credit score. Aim to use less than 30% of your available credit limit to maintain a healthy credit utilisation ratio. One effective strategy is to pay off your Credit Card balances before the billing cycle ends.

4. Consider a secured Credit Card

Using a secured Credit Card is effective for rebuilding your credit score. These cards necessitate a security deposit that usually serves as your credit limit, making them a viable option for those with low or no credit history. To benefit from this tool, make small purchases and consistently pay off the balance in full each month.

This responsible usage demonstrates good credit habits and will significantly improve your credit score over time. The card issuer will report your activity to the credit bureaus, ensuring that your positive behaviour is accurately reflected in your credit report.

5. Apply for credit wisely

Applying for a new Credit Card should be done cautiously to avoid a negative impact on your credit score. It is advisable to limit the number of credit applications and apply only when necessary. Selecting credit products that align with your current credit standing can improve your chances of approval.

Also Read: Simple ways to get Credit Card without CIBIL score

Conclusion

Rebuilding your credit score requires patience and consistency. The best way to rebuild credit score involves understanding your credit report, paying your bills on time, managing your credit utilisation and using tools like secured Credit Cards and credit monitoring services. By following these steps, you can steadily improve your credit score, paving the way for a healthier financial future and better access to credit opportunities.

Axis Bank offers a range of Credit Cards tailored to your needs. You can enjoy discounts and cashback on travel and dining, welcome benefits and airport lounge access. Axis Bank also offers competitive Credit Card interest rates to ease the burden on your finances.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.