How to Rebuild Your Credit Score After a Credit Card Settlement (Bank Harassment Guide)
Settling a credit card debt can provide temporary financial relief, but it often comes with long-term consequences, such as a damaged credit score. If you’ve faced bank harassment during the settlement process, the situation can feel even more stressful.
However, it is possible to restore your creditworthiness and regain financial stability. In this blog, we will guide you through practical steps to rebuild your credit score after a settlement while addressing bank harassment issues.
Understanding the Impact of Credit Card Settlement on Your Credit Score
When you settle a credit card debt, the bank reports the account as “Settled” instead of “Closed” in your credit report. This can:
❌ Lower your credit score by 50-100 points
❌ Make future loans difficult to get as lenders see you as a high-risk borrower
❌ Remain on your CIBIL report for up to 7 years
Additionally, many borrowers face harassment from recovery agents even after settling their debts. Banks may continue to pressure them for additional payments or refuse to provide a No Objection Certificate (NOC).
If you’re facing such issues, know your rights and take action against unfair practices.
Step-by-Step Guide to Rebuilding Your Credit Score
1️⃣ Obtain Your Credit Report & Check for Errors
📌 Request your CIBIL report and look for incorrect information.
📌 If the settlement is not updated correctly or harassment continues, file a dispute with CIBIL.
📌 Ensure the bank provides a No Objection Certificate (NOC) after settlement.
👉 Action: Dispute errors online at CIBIL Dispute Resolution
2️⃣ Pay Your Remaining Debts on Time
📌 Start making timely payments for any existing credit cards, loans, or bills.
📌 Set up auto-payments to avoid missing due dates.
📌 Keep your credit utilization below 30% to maintain a healthy score.
👉 Action: Avoid using more than ₹30,000 if your credit limit is ₹1,00,000.
3️⃣ Apply for a Secured Credit Card
📌 If your score is too low, banks may reject new credit applications.
📌 A secured credit card (issued against a fixed deposit) can help rebuild your score.
👉 Action: Use a secured credit card regularly and pay bills on time.
4️⃣ Avoid Taking New Loans Immediately
📌 Wait at least 6-12 months before applying for a new loan.
📌 Focus on clearing existing debts first.
👉 Action: Use small credit purchases and repay them fully every month.
5️⃣ Report Harassment from Banks or Recovery Agents
📌 RBI guidelines prohibit banks from:
✅ Calling at odd hours (before 8 AM or after 7 PM)
✅ Threatening or using abusive language
✅ Visiting your home or workplace repeatedly
👉 Action: File complaints with the Banking Ombudsman if harassment continues.
What to Do If Your Credit Score Is Not Improving?
✔ Check your credit mix – A combination of secured (loans) and unsecured (credit cards) debt helps.
✔ Increase your credit limit – A higher limit with low usage improves your credit utilization ratio.
✔ Wait patiently – Score improvement takes 6-12 months with disciplined financial habits.
Final Thoughts: Take Control of Your Financial Future
Rebuilding your credit score after a settlement takes time, but with the right steps, you can regain financial stability. If you are still facing harassment from banks or recovery agents, take legal action and know your rights.
Need help? Settle Loan assists borrowers in resolving debt issues and stopping bank harassment.
📞 Call Now: 1800 309 1902
📧 Email Us: info@bankharassment.com
