If your Credit Score is down in the dumps and you think there’s no way out of it, don’t panic. We’re here with stories that will help you buckle up and fix your credit.
Having a poor Credit Score is not the end of the world. What you need is a plan to get out of your situation and get your finances back on track. Instead of beating yourself up over your low score, check out these Credit Score success stories.
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Time to bounce back
Ankush Khatri had filed for bankruptcy when he was Rs. 10 lakhs in debt. This sum also included Rs. 7 lakhs in Credit Card debt. To make things worse, his Credit Score was somewhere in the 500s.
Finding himself unable to repay his debt and knowing full well that his situation wasn’t likely to change in the next couple of years, he decided to take charge of the situation. Instead of repeatedly missing due dates, he filed for bankruptcy. After getting most of the debt removed from his account, he was left with a Rs. 45,000 car loan. With the lion’s share of her loans withdrawn, this left a huge room for improvement.
Ankush was determined never to repeat his mistakes. He took his finances seriously and never missed a payment deadline. His first priority was to clear off the outstanding debts. For a whole year, he religiously made monthly payments on time and in full. In no time, his score shot up and was in the 600s in just a year after bankruptcy. In addition, Ankush said that he refrained from opening any new lines of credit for two years and successfully bounced back from bankruptcy.
Ankush’s story is proof that bankruptcy doesn’t mean you’re financially shattered forever. There’s always a way out. With proper money management habits anyone, even someone who has filed for bankruptcy, can rebuild his/her credit.
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Start, even if it’s from scratch
When Vibhu Sengupta checked his score for the first time, he was devastated. Not only was his Credit Score non-existent, but also he had no credit history.
His parents had always talked him out of getting a Credit Card. They had been so distrustful of handing a line of credit that they never talked about the benefits of using a Credit Card responsibly to build a solid credit history.
Vibhu was looking forward to getting his own place and was in urgent need of a Home Loan. It wasn’t long before he realised that he wasn’t getting any close to getting a Home Loan with a sub-par score such as his. But, he didn’t lose heart. He had heard of many examples of people who started from scratch and built their credit history.
To start off he made a wise move and took a Short-term Personal Loan, making sure to make the monthly loan repayments on time and in full. Sometimes, he paid off the monthly dues even before the deadline. Next thing he knew, his loan was repaid and in two years, his score was 650.
With a good score in hand, he managed to easily secure a Home Loan and in a year, moved in to his new home. He has never missed a payment deadline. Today Vibhu is proud of his credit behaviour and is also a responsible user of multiple Credit Cards too.
Just being on time with your payments and paying the full amount is all you need to boost your Credit Score. Easy, right?
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Automate, automate, automate!
When Kalyani Sur missed a couple of loan payments, her Credit Score was in 700s. Things got worse and soon she was 4 months late on her Home Loan bills, about 2 months late on her Car Loan and more than 90 days late on her Credit Card bills.
Having missed so many of her bill payments, Kalyani found herself swamped in debt. Her first move was to get out of it. That’s when she spoke to a friend about her financial troubles. Her friend, a financial advisor by profession, suggested that Kayani automate her payments. Intrigued? Read on!
Our payment history accounts for a good 35% of our Credit Score, which means that simply paying your bills on or before the due date is enough to improve your score. Like Kalyani, if you’re struggling to manage your money, you can get in touch with your bank or Credit Card service provider and set up auto-payments on your bills.
This way, your bill amount will be automatically debited from your accounts and you’ll never miss a payment deadline again. To be extra cautious, you can check them once a month just to make sure the payments have gone through.
After Kalyani automated her payments, she never had to worry about missing a bill payment. And, her score shot up and within a year, it was back in the 700s.
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What else can you do in the process of increasing your Credit Score? Well, one of the easiest things and also extremely essential is to check your Credit Score and credit report regularly. Worried about the expenses? Don’t you worry. With BankBazaar at your service, you can easily check your latest Credit Score and credit report in less than 3 minutes! What’s even better is that you can check it as many times as you want and at zero cost!
And while we’re on the subject of mending a bad score, if you’re looking for a Credit Card or a Personal Loan, we’ve got a bunch of offers for you!