You’ve missed your EMI payments, and now you’ve penalty interest to pay and a bad credit report. Now, what options do you have? We’ve listed some options that you can use to correct your credit score. 1. Contact the Bank/NBFC Your credit score reduces when your bank/NBFC from whom you’ve borrowed the loan report non-payment to credit-reporting agencies like CIBIL, Experian, etc. Upon receiving a negative signal from the lender your credit report gets affected and your credit score suffer. So, if this is your case, you can contact the lender and pay the bank whatever is due including interest and late due charges. 2. Check credit report If you’ve not defaulted on a loan EMI and still your credit score is reducing, check the report and see where it is affecting your score. You might be a co-borrower in a loan which is not being paid on time and now your score is suffering due to the same. Or it could be a loan that is paid off and still giving negative signal to your account. In such cases, raise a dispute and correct your credit score. 3. Limit your credit utilisation You must’ve been running on a lot of loans or line of credits. This reduces your repayment capacity and affect your credit score a few basis points. In this situation, avoid using your credit cards. Don’t close your credit card account just keep the cards and limit your usage. This will reduce your debt burden and make it easy to manage good credit score. 4. Check your credit score Before borrowing any new loan or a credit card, it is your responsibility as a borrower to check your credit score. How will this benefit you? There will be lower loan rejections, you get idea whether your score is eligible for a new credit. This way, you can avoid ruining your score. And if you find any minor glitches in your score, check your report from the authorised credit bureaus, such as CIBIL, Experian and more.(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)