Credit repair is the process of improving your credit score by correcting errors on your credit report, clearing outstanding dues, and building a strong repayment history.
It aims to fix issues that are pulling your CIBIL score or other credit bureau scores down.
👉 In simple words:
Credit repair = steps taken to clean up your credit report and improve your credit score.
This can be done by yourself or through professional credit repair agencies.
Why Is Credit Repair Important?
A good credit score helps you get:
Faster loan approvals
Lower interest rates
Higher credit card limits
Better chances of housing or vehicle finance
Stress-free financial access
When your score drops due to errors, late payments, or defaults, credit repair helps rebuild your financial credibility.
What Causes a Low Credit Score?
Common reasons include:
Missed or late EMIs
High credit card utilisation
Loan defaults
Multiple loan applications
Wrong information in CIBIL
Old unpaid dues
Reporting errors by banks
Credit repair focuses on addressing these issues one by one.
How Does Credit Repair Work?
1. Checking Your Credit Report
The first step is analysing reports from:
CIBIL
Experian
Equifax
CRIF High Mark
This reveals errors, overdue accounts, or negative flags.
2. Disputing Incorrect Information
If there are mistakes like:
Wrong loan entry
Incorrect overdue amount
Closed account showing as active
Repaid loan marked as default
You can file a dispute with the credit bureau to remove or fix them.
3. Clearing Outstanding Dues
Credit repair often involves:
Paying overdue EMIs
Settling old accounts
Clearing credit card dues
Negotiating with lenders for settlements
Once dues are cleared, the lender updates your report.
4. Improving Repayment Behaviour
This includes:
Paying EMIs on time
Keeping credit utilisation below 30%
Avoiding new loans temporarily
Maintaining one active credit line for timely payments
A few months of disciplined behaviour boosts your score.
5. Using Credit-Building Tools
Credit repair may also involve:
Secured credit cards
Credit builder loans
Low-limit credit cards
These help rebuild positive repayment history.
Where Does Credit Repair Work?
Credit repair is commonly used when people want to:
✔ Get a Loan Approved
Banks often reject loan applications due to poor credit history.
Credit repair improves your chances.
✔ Reduce Loan Interest Rates
A better score helps negotiate lower interest rates.
✔ Get a Credit Card
Many people repair credit to qualify for premium cards.
✔ Apply for Home Loans
Housing loans require strong credit credibility.
✔ After Financial Setbacks
Such as:
Job loss
Medical emergency
Business loss
Debt settlement
Credit repair helps rebuild financial health.
✔ Fix Credit Report Errors
Many borrowers repair credit because banks reported:
Wrong overdue records
Duplicate loans
Inaccurate repayment status
Do Credit Repair Agencies Really Work?
They can help with:
Analysing reports
Filing disputes
Negotiating with lenders
Guiding repayment planning
But credit repair is not magic — it cannot wipe out legitimate defaults.
You can also repair credit yourself for free by:
Paying dues
Correcting errors
Improving repayment discipline
FAQs
1. What is credit repair?
A process to improve your credit score by correcting errors and clearing dues.
2. Can credit repair remove genuine defaults?
No, only errors or incorrect entries can be removed legally.
3. How long does credit repair take?
Usually 3 to 6 months depending on repayment behaviour and corrections.
4. Is credit repair legal in India?
Yes, as long as it involves correcting errors and legitimate processes.
5. Can I repair my credit score myself?
Yes, most credit repair steps can be done without an agency.
Published on : 19th November
Published by : SMITA
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