How to Improve Your CIBIL Score After a One-Time Settlement (OTS)

After settling a debt with your bank through a one-time settlement (OTS), you may experience confusion if your CIBIL score does not immediately reflect this improvement. While your score may not rise immediately, there are several steps you can take to positively influence it over time.

Checking Your Credit Report

The first and most important step is to obtain a copy of your CIBIL credit report. This will help you verify that the one-time settlement has been accurately reflected in your report. Check for any inaccuracies or discrepancies that could be affecting your score.

Disputing Errors

If you find any inaccuracies in your report, you should file a dispute with CIBIL to have them corrected. Disputing errors can help improve your score once they are resolved. It's essential to provide detailed evidence to support your claim for a faster resolution.

Timely Payments

One of the most crucial factors in improving your CIBIL score is to ensure you pay all your current and future bills on time. This includes credit card payments, loan EMIs, and other financial obligations. Consistent timely payments can help improve your score significantly over time.

Limiting New Credit Applications

Avoid applying for new credit cards or loans, as multiple inquiries can negatively impact your score. If you need additional credit, consider waiting until your score improves, or opt for secured credit cards that have a lower impact on your overall credit profile.

Maintaining Low Credit Utilization

If you have credit cards, aim to keep your credit utilization ratio below 30%. This means using less than 30% of your total credit limit. Lower credit utilization is positively viewed by credit bureaus and can help improve your score.

Building Positive Credit History

Consider using a secured credit card or a small personal loan to build a positive payment history. Ensure that you make timely payments. Positive payment history, regardless of the size of the loan, can significantly improve your creditworthiness.

Keeping Old Accounts Open

Old credit accounts with a positive history contribute to your credit length, which positively impacts your score. Keep these accounts open to maintain a longer credit history.

Monitoring Your Progress

Regularly check your credit report and score to track improvements. Monitoring your progress can help you understand the effectiveness of your actions and make necessary adjustments.

Consider consulting a credit counseling service for personalized advice if you are unsure about how to proceed. These services can provide valuable guidance and support as you work to improve your CIBIL score.

Raising a Dispute on Your CIBIL Report

To further ensure the accuracy of your CIBIL report, you can log in to CIBIL with a paid subscription and raise a dispute against any accounts that are not updated with the correct information. Specifically, you should dispute the following fields if they are not accurate:

Amount Overdue Current Balance Date Reported by Loan Date Closed Date of Last Payment

Providing accurate and detailed information during the dispute process can help resolve these issues and improve your CIBIL score.

Improving your CIBIL score after a one-time settlement is a gradual process. Patience and consistency are key. By following these steps, you can work towards a better credit score and financial health.