HOW TO IMPROVE YOUR CREDIT SCORE QUICKLY

Worried about your falling credit score and not sure about the steps to take? You’re not alone! Your credit score is more than just a number; it’s a key part of your financial profile. It can determine how easily you can get credit cards, loans, and sometimes, housing.

The good news? This guide tells you how to improve CIBIL score. You will learn clear, focused strategies to help you boost your score faster and more effectively. Whether you're trying to recover from past issues or simply want to strengthen your profile, these tips can help.

Key Takeaways

Here’s a summary of what you’ll learn from this guide:

●      Your CIBIL score is a unique number that represents your creditworthiness, which influences your ability to obtain loans and credit cards.

●      It is influenced by characteristics such as payment history, credit utilization, loan applications, and credit history duration.

●      Pay invoices on time, keep credit usage low, limit active loans, eliminate excessive guarantees, and review your credit record for inaccuracies.

●      With constant effort, your score can improve in 3-6 months. A good credit score, combined with the correct insurance, promotes long-term financial stability.

 

What is CIBIL Score?

CIBIL Score is a three-digit number that decides how worthy you are of securing a loan or buying a product or service on credit. The score is issued by the Credit Information Bureau (India) Limited, a credit rating agency authorized by the RBI. Your score typically ranges between 300 and 900, where a higher value reflects healthier credit.

Banks and financial institutions rely on your CIBIL score when reviewing credit applications. A higher score improves your chances of getting approved for credit cards, home loans, personal loans, and other financial products.

 

Factors Affecting CIBIL Score 

Changes in the CIBIL score matter as they can affect your capacity to get credit for your expenses. So, before you learn how to increase credit score, let’s look at the major factors that are likely to have a negative effect on this score:

1. High Ratio of Credit Utilization:

This ratio shows the amount of credit used in proportion to the credit limit that’s available to you. Experts say that you shouldn’t ideally use more than 30% of your limit. Using more than 50% of your limit can have an adverse effect on your score.

2. Payment Behaviour: 

Your payment history is one of the biggest factors affecting your credit score. Make sure to pay the bills for your credit card as well as the loan EMIs regularly. As per the findings of Financial Express, a 30-day delay can reduce the score by as many as 100 points.

3. Multiple Credit Applications: 

When you apply for a credit card or loan, lenders test your creditworthiness by analyzing your credit report, leading to a hard inquiry. If you submit multiple applications in a short period, that may trigger inquiries, impacting your score negatively.

4. Length of Credit History: 

Credit history is the number of years that have passed since you opened the credit account. In case you have a long credit history, it can help lenders make a well-informed decision while offering you credit.

 

How to Improve Your CIBIL Score 

If you’re wondering how to increase CIBIL score, here are eight fool-proof ways that will be most beneficial: 

1. Maintain Healthy Credit

Use your credit card consistently and repay your credit card bills on time. It shows that you’re responsible with repayments, which helps boost your credit score. Even small, regular purchases followed by timely payments can make a positive impact.

2. Avoid Being a Guarantor 

If you become a guarantor for someone else’s loan, a default on their part may adversely affect your credit score. So, you should agree to such an arrangement only if you’re absolutely sure that the borrower is financially stable and can repay the loan on time.

3. Limit Active Loans 

Each time there’s a credit inquiry, it can marginally reduce your credit score. The burden of your debt will also increase, affecting your capacity to repay the loans. So, by keeping the active loans in check, you can show financial discipline and reduce the chances of delayed or missed payments.

4. Increase Credit Limit

Raise your credit limit, as that can increase the total credit available to you and reduce the ratio of your credit utilization. You can ask for an increase in the credit limit if you’re earning more than when you applied for a credit card the last time. Or else, you can open a new credit account.

5. Opt for Longer Loan Tenure 

If you go for a longer loan tenure, the burden of repayment would ease. Although this will mean paying more interest over the lifespan of the loan, it can help maintain a sound credit history.

6. Diversify Your Credit Mix 

Instead of relying on just one type of credit, maintain a healthy mix, like credit cards, home loans, and personal loans. A balanced credit portfolio shows good credit management and can help improve your credit score over time.

7. Limit Credit Utilization 

When you keep your credit utilization within a limit, it can help increase CIBIL score. Try to use less than 30% of the available credit so that lenders can know that you can manage credit responsibly.

8. Check and Report Credit Report Errors 

At times, an incorrect entry, such as an unpaid loan or a wrong credit limit, can bring the score down. To avoid surprises, make it a habit to review your CIBIL report and correct any errors.

Conclusion

Overall, these well-thought-out steps can help you build healthy credit habits in the long run. And in turn, you can build a strong credit history to get loans easily at more competitive interest rates.

Improving your credit score is just one part of financial well-being. Choosing the right insurance protects you from unexpected expenses and strengthens your overall financial security.

From health insurance to travel and motor coverage, Quickinsure provides access to plans that align with your financial goals.

 

FAQs

1.    What is the fastest way to improve CIBIL score in India?

To increase CIBIL score, you’ll need to follow steps like getting secured credit through FD-backed credit cards, paying credit card bills and EMIs on time, and keeping your credit utilization below 30%. Many borrowers have seen improvements in their credit scores within 3-6 months by doing this.

2.    How long does it take to increase CIBIL score?

While you may spot small improvements in 1-2 months, steady growth can be visible in 3-6 months. To get significant gains, such as a credit score of over 750, it can take 6-12 months. For those with more serious issues like missed payments, rebuilding a credit score can take longer.

3.    Why is my CIBIL score not increasing?

If your score has stagnated, it might be because of high credit utilization, missed payments, lingering errors, or frequent hard inquiries. To improve the score, you’ll need to make on-time payments and use your credit more responsibly.

4.    Does checking CIBIL score reduce it?

No, checking the score personally doesn’t influence your CIBIL score, as it is a soft inquiry. Only a hard pull by a lender during a credit application can lead to a temporary dip in the score.

5.    Is 700 a good CIBIL score for a loan?

Yes, you can regard 700 as a good score, as it may help you secure loans with reasonable terms. That said, lenders consider 750+ as an ideal score and reserve the best offers for such borrowers.

6.    What CIBIL score is needed for a home loan?

Certain home loan lenders accept a score of 650+, while most prefer 700-750 for streamlined approvals and better rates of interest. To ensure you get the most favourable loan terms, make sure to aim for a score of 750+.