How to improve your CIBIL or Credit Score?
Improving your CIBIL score (or any credit score) takes time and discipline. Here are some key strategies to boost your score effectively:
1. Pay Your Bills on Time
Timely payments of credit card bills, loan EMIs, and utility bills show responsible financial behavior.
Set up automatic payments or reminders to avoid delays.
2. Maintain a Low Credit Utilization Ratio
Use less than 30-40% of your credit card limit.
If possible, pay off the balance in full rather than carrying it forward.
3. Avoid Multiple Loan/Credit Card Applications
Every time you apply for a loan or credit card, lenders check your CIBIL score, which can lower it temporarily.
Space out your applications to avoid looking credit-hungry.
4. Keep Old Credit Accounts Open
A long credit history improves your score.
If you have an old credit card with a good repayment history, keep it active.
5. Maintain a Healthy Credit Mix
Having a mix of secured (home/car loan) and unsecured loans (credit cards, personal loans) can help.
Too many unsecured loans can negatively impact your score.
6. Regularly Check Your CIBIL Report for Errors
Get a free CIBIL report once a year and check for inaccuracies.
If you find errors (like incorrect loan records or payments), dispute them with CIBIL.
7. Avoid Settling Loans or Credit Cards
Loan settlements (where you pay a lower amount than due) negatively impact your score.
Always aim for "closed" instead of "settled" status on loans.
8. Increase Your Credit Limit (But Don’t Use It Fully)
A higher credit limit with low usage improves your utilization ratio.
Request a credit limit increase if you have a good payment history.
9. Use Different Credit Types Responsibly
Having a mix of long-term (home/car loans) and short-term credit (credit cards) shows financial stability.
Avoid taking unnecessary loans just for the sake of having a mix.
10. Be Patient and Consistent
Improving a low credit score takes at least 3-6 months of disciplined financial behavior.
Avoid quick-fix solutions that could harm your credit health in the long run.