When it comes to settlement, be it for credit card or loan, it definitely has a negative effect on your credit score as well as your credit history. But you don’t need to worry at all as with the help of some effective methods, you can repair your CIBIL score after settlement.
Applying for a secured credit card is the best solution that enhances your CIBIL score and also increases your chances of loan/card approval. These cards are offered only against the fixed deposit account and come with a credit limit of some percentage of the principal amount in your fixed deposit account. Well, which simply means you won’t be able to spend more as there is already a predefined limit thus it is easy for you to be in the limit.
Another effective measure that helps in rebuilding your score is timely payments. Yes, making all your loan/credit card payments in time and in full, starting right away. Not only this, you might have to restrict your spending in order to be able to make full payments as doing so will have an immediate and significant impact on your score after settlement.
Apart from these, changing your status from settled to close will also work in your favour. Yes, a settled status still has a negative effect on your score as it shows you have not paid your dues in full. Talk to the lender and agree on a mutually acceptable amount, based on your income and affordability, that will allow you to convert it to a closed account. Hence, this will have a significant positive impact on your CIBIL score and CIBIL report.