Life Style

How to Improve Your CIBIL Score?

A good credit score is essential for achieving financial goals. Whether you’re applying for a loan, a credit card, or even renting an apartment, your CIBIL score plays a significant role. But what exactly is a CIBIL score, and how can you improve yours?

CIBIL, short for Credit Information Bureau (India) Limited, is a credit information company that maintains credit reports of individuals in India. Your CIBIL score is a numerical representation of your creditworthiness, based on your credit history. Lenders use this score to assess your ability to repay debt, and a higher score generally translates to better loan terms and interest rates.

Here are some key strategies you can use to build and improve your CIBIL score that might help you get loans or show creditworthiness:

1. Pay Your Dues on Time

This is the most crucial factor influencing your CIBIL score. Missed or late payments on EMIs (Equated Monthly Installments) for loans or credit card bills negatively impact your score. Develop a system to ensure timely payments. Set up automatic bill payments or reminders to avoid any accidental delays.

2. Manage Credit Utilisation Ratio

Your credit utilisation ratio is the percentage of your credit limit you’re currently using. Ideally, you should keep this ratio below 30%. For instance, if your credit card limit is Rs. 1 lakh, aim to maintain a balance below Rs. 30,000. A high credit utilisation ratio indicates dependence on credit and can lower your score.

3. Obtain a Credit Mix

Having a healthy mix of credit products, like a secured loan or a credit card, can positively affect your score. Secured loans, backed by collateral, demonstrate responsible borrowing behaviour. However, avoid applying for numerous loans or credit cards within a short period of time, as this can be seen as credit hungry behaviour and negatively impact your score.

4. Maintain a Long Credit History

The longer your credit history, the better. Opening a savings account and using a debit card can help establish a credit history early on. Once you have a credit card, use it responsibly and make timely payments to build a positive credit history.

5. Check and Dispute Errors in Your CIBIL Report

It’s crucial to regularly review your CIBIL report for any errors or discrepancies. These errors could be incorrect information about your loans, credit cards, or defaults. If you find any mistakes, dispute them with CIBIL immediately. A clean and accurate credit report is vital for a good score.

6. Be Cautious of Co-signed Loans

While co-signing a loan can help someone establish credit, it also ties you to their repayment behaviour. If the co-borrower defaults, it will negatively affect your CIBIL score as well. Co-sign only for individuals you trust and are confident will repay the loan responsibly.

7. Limit Hard Inquiries

Every time you apply for a loan or credit card, a hard enquiry is placed on your credit report. Multiple hard enquiries in a short period of time can lower your score slightly. Space out your loan applications and avoid applying for credit unless absolutely necessary.


Building a good CIBIL score takes time and discipline. By following these strategies and practising responsible credit management, you can gradually improve your score and unlock better financial opportunities. Remember, a healthy credit score is an essential tool for achieving your financial goals.

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