Struggling With Credit Card Payments? Here's How to Rebuild Your Credit Score After a Default

1. Convert Your Dues Into EMIs

No assets to liquidate or low bank balance? You can request to convert your credit card balance into EMIs. It’s much better than ignoring your bill entirely.

2. Prioritize Which Bills to Pay First

If you have multiple debts, pay off the higher interest loans or bills first. If you can’t cover all, protect at least one account to safeguard part of your credit score.

3. Consider a Personal Loan

Struggling with high balances across multiple cards? A personal loan can be a good option since it usually offers a lower interest rate than credit cards.

How to Rebuild Your Credit Score After Missed Payments:

Once you’ve handled the immediate crisis, here’s how you can improve your credit score:

4. Pay On Time Moving Forward

Your payment history is key to your credit score. Set up auto-pay or payment reminders to ensure you never miss another due date, even for small amounts.

5. Opt for a Secured Credit Card

If your score has taken a hit, consider using a secured credit card to rebuild it. This card works by securing your credit limit with a deposit. Use it wisely and pay on time to boost your score.

6. Check Your Credit Report for Errors

Get a free report from credit bureaus annually and check for mistakes. Report any discrepancies immediately.

7. Keep Your Credit Utilization Low

Try to use no more than 30% of your available credit. For example, if you have a credit limit of ₹1,00,000, aim to keep your balance below ₹30,000.

8. Avoid Opening Too Many New Credit Accounts

Opening multiple accounts in a short period can negatively impact your score. Focus on managing your current accounts well before adding new ones.

By following these steps, you can bounce back from a payment default and rebuild your credit score over time!