Introduction
Your CIBIL score is the most important factor for availing loans, credit cards, or even house rentals in India these days. It’s a figure that indicates how reliable you are while repaying borrowed funds. If your score is less than 750, it’s likely that banks might reject your loan application outright or provide it with higher interest rates.
When I initially looked up my CIBIL score, it was unexpectedly low — under 650. I did not even understand what went wrong. But within a few months, I adopted some basic measures that significantly changed it for the better.
Enhancing your credit score is not science fiction. It simply requires persistence, financial responsibility, and a definitive strategy. In this blog post, I will outline 10 tested methods that I used myself (and suggest) to raise your CIBIL score in India — step-by-step and without spending money on any paid services.
Whether you’re going to apply for a home loan, personal loan, or need a higher limit on your credit card, these tips will take you there quicker. Let’s get started.
1. Check Your CIBIL Report Regularly
If you want to improve your CIBIL Score, the first important step is to check your credit report regularly once a month or at least once in three months. Your credit details, last month’s payment history, loan enquiries, credit card usage details are all recorded in the CIBIL report.
Many times, your CIBIL Score can be low due to incorrect information in the report. For example, even if you have paid the bill, it can be shown as late payment. A non-existent loan can be shown as pending. This can affect your creditworthiness.
So, download your report from the official CIBIL website or RBI-approved platforms like Experian, CRIF and check it properly. If there is any mistake, you can raise a dispute immediately. When some mistakes are corrected, there can be an immediate positive change in your CIBIL Score.
Checking your CIBIL report periodically will help you keep control over your finances. This is a simple yet effective habit to improve your score. Starting today, make it a habit — it’s a smart step for your financial future!
2.Pay Credit Card Bills on Time
Do you want to increase your CIBIL Score? The first important habit for that is – paying credit card bills on time. Even though we all know the due date, sometimes we miss it. But this is a big minus for your credit score.
Banks evaluate your score based on your repayment behavior. Even if you make a late payment for a month, it will be added as a negative record in the report. This will also become a big obstacle for your future loan approvals.
I followed a simple trick – I enabled the auto-debit option. Otherwise, I set a reminder and cleared the bill before the due date. Always try to make full payment, not just the minimum due. This will avoid interest and benefit your score as well.
Not only paying bills on time, but making consistent payments will steadily raise your CIBIL Score. This may seem like a simple habit, but it is the foundation for financial health.
Tomorrow, when you apply for a loan, the bank will look at your score and assess your stability. So that you don’t regret it, start clearing your bills on time from today!
3.Keep Credit Utilization Below 30%
If you use a credit card, there is a limit to it — if you use more than 30% of that limit, it will lower your CIBIL Score. Many people don’t even notice this.
For example, if your card limit is ₹1,00,000, it is better if you use less than ₹30,000 that month. If you swipe more than ₹70,000–₹90,000, it will appear as financial pressure to the bank. Therefore, banks will assess it as “this customer may be risky”. Due to this, your CIBIL Score will be affected.
I ignored this initially. The usage was up to 80%. After that, whenever I made a mistake, the score gradually started improving. That is why, if we stay below the usage limit, we will benefit in the long-term.
Although this tip may seem very simple, it is an important one for your credit score. Use your credit card smartly. If you need to spend more, you can request an extra card or discuss with your bank whether you can increase the limit.
Importantly, if you maintain your credit usage within 30%, your CIBIL Score will be safe and steady. This will also give you confidence in future loan approvals.
4.Don’t Close Old Credit Cards
If you have an old credit card that you are not using, do you think you can cancel it? Many people do this. But in reality, this is a major reason that affects your CIBIL Score.
Old cards reflect your credit history. If you have used that card responsibly for a long time, it will be a strong repayment record for the bank. If you have closed that record, your total credit history will be short. This is likely to reduce your CIBIL Score.
What I have learned from my own experience – closing a card that I used for 6 years, my score went down a bit. It was only later that I realized that long-term credit relationship is also a positive factor.
Also, if you have closed the card, your total available credit will be reduced. Therefore, your credit utilization percentage may increase – this is also a negative sign.
So, even if you have an old card with no maintenance fee, it is a plus point for your CIBIL Score. Keep it safe, even if you’re not using it often. Even if there is a day of no usage, keeping it active will keep your credit history intact.
Note: Before closing an unnecessary card, analyze your credit profile and understand the impact before making a decision.
5.Maintain a Healthy Mix of Credit
If you have different types of credit like personal loan, home loan, credit card, it is called Healthy Mix of Credit. This is an important reason that helps in improving your CIBIL Score.
For a good credit profile, both secured loan (home loan, car loan) and unsecured loan (personal loan, credit card) should be balanced. This is why banks & financial institutions see us as responsible borrowers. If you use only credit cards, the lack of diversity in them will limit your credit profile.
In my own experience, at one point I had a personal loan and a credit card. Due to that, I got a good rating for consistent repayment. This made my CIBIL Score rise steadily.
Apart from maintaining only one type of loan, having a loan mix as per the requirement will show us credibility when taking a loan in the future. This will make the banks feel that “this borrower is trustworthy”.
Simply, consider just having a credit card as a beginning. Then gradually add a secured loan. If you maintain a balance, your CIBIL Score will be on the growth path.
6.Avoid Applying for Too Many Loans at Once
It is normal to apply for a loan when we need it. But applying for a loan at multiple places at the same time can greatly affect your CIBIL Score. Do you know why?
Every time you apply for a loan or credit card, the financial institution checks your credit report. This is called a hard inquiry. If many hard inquiries come in a short time, CIBIL thinks, “Is this borrower under financial stress?”
I once applied to 4 banks to get a loan approval quickly. Because of that, my CIBIL Score dropped by 15 points. I only realized later – more than 2-3 loan inquiries in a month will lower your score.
So, what should you do?
Check your eligibility before applying for a loan.
If there is a pre-approved offer, consider it only then.
Apply for need-based loans only; don’t try multiple times.
This simple habit alone will protect your CIBIL Score in the long-term. It will also reduce the chances of loan rejection. Apply for loans mindfully; it’s good for your credit future!
Conclusion
In the current financial climate, banks will confidently approve you for any loan, credit card or housing loan only if you have a good CIBIL Score. Such a score does not develop overnight. These can be created only through small but regular financial habits.
Many of us are currently worried about having a low CIBIL Score. But instead of seeing it as a problem, see it as an opportunity. You can improve your score through practices like paying credit card dues on time, keeping credit utilization below 30%, not closing old credit accounts, and maintaining loan diversity.
I have built a good CIBIL Score in my life by paying EMIs with discipline, avoiding unnecessary loans, and due to this, I got approved very easily when I applied for a home loan in the future.
So, you too, start planning today. By making small changes in your financial habits, your CIBIL Score will increase day by day. A good score will give you a confident financial future, which will help you reach your goal faster!
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