Your loan applications are getting rejecting because what you have done is a "settlement". This means that the bank/lender would have waived a part of your interest.
Anyone with a settlement is still considered a defaulter. You need to find a way to increase your credit score by getting someone to give you a fresh loan to rebuild your score.
Please understand, there are no short cuts to this. And there are no easy and quick fixes either. If you hear from companies that offer to fix your credit score for a fee or remove you from the defaulters list for a price, it is false.
Having said that we suggest you go for a small ticket size credit such as secured credit card/loan against a fixed deposit (FD) and ensure that the credit card payment / loan is paid in full before the due date. This will be a good first step in establishing a positive credit history for you.
Asking your bank/ lender to open a secured account, can be a good way to demonstrate you can manage your finances, which can lead to establishing a credit history and building strong credit scores, although it might not happen right away. You can then check back on a regular basis to monitor your progress.
Also remember, do not make inquiries with several companies/ lenders for credit card or personal loan, unless it is really needed as this also affects your credit score.
Even in that case, as mentioned above, you should check with a bank if you can get a secured credit card against a FD. The methods mentioned above would help you to improve your credit history and score over a period, lets say 12 months or more (depending upon the existing score). But there is no short cut for this.
Sucheta Dalal Trustee - Moneylife Foundation
Abhay Datar Abhay Datar is a consumer activist. After working at Bank of Baroda for about 29 years, he retired as IT Manager. After retirement, Mr Datar joined Consumer Guidance Cell of Mumbai Grahak Panchayat (MGP) in 2008 and solved many cases related to banking including online fraudulent transactions, misuse of credit cards and ATM cards. Also handled cases related with mobile banking frauds and mediclaim. He was a Member of the Managing Committee of MGP till March 2021.
Shirish Shanbhag Shirish Shanbhag has an MSc in Organic Chemistry, Diploma in Higher Education, a Diploma in a French and has completed his LL.B. in first class, in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, where he taught theoretical and practical chemistry. Post retirement in 2012, he started providing guidance and counseling to people on several issues, with a specific focus on co-operative housing society related matters. Adv Shanbhag has a kee
Suresh Prabhu Mr Prabhu retired as Senior Vice President from HDFC Bank
R Bhuvaneswari After serving Bank of Baroda for almost 40 years, Ms Bhuvaneshwari retired as Chief Manager in 2013.
Yogesh Sapkale Yogesh Sapkale is Deputy Editor of Moneylife and writes on finance, credit related issues