5 ways to improve your credit score

Having a good credit score pays off. It can help you secure better and faster loan approvals. On the other hand, a poor CIBIL score can be alarming for those in desperate need of money as it can have a negative impact on their borrowing capabilities.

There are numerous ways to obtain loans, and the requirements for obtaining them are entirely based on the size of the loan, specifically the amount requested by the borrower. However, all banks are now obligated to verify the CIBIL score of all applicants for various financial products, including personal loans and credit cards. Even if an individual has a poor CIBIL score, there are techniques available to improve it.

CIBIL is one of India’s leading credit rating companies. Banks and financial institutions rely on the CIBIL credit score to assess the creditworthiness of borrowers. An exceptional credit score is considered to be 700 or higher. If your score is below that, you may face challenges in obtaining loans quickly.

How to increase credit score?  

  1. Set Reminders or Standing Instructions to Repay on Time

Missing debt repayments can be a costly mistake, as it can have a detrimental effect on your CIBIL score. When it comes to paying off your credit card or loan EMIs on time, it is crucial to be diligent. If your EMIs are skipped or delayed, not only will you be penalized, but you will also experience a significant decrease in your credit score.

Two effective techniques to avoid payment delays are setting reminders to repay on time and setting up Standing Instructions/Orders with your bank account. With reminders, you can ensure that you never miss a payment deadline. 

By setting up Standing Instructions/Orders, a defined amount will be deducted from your account at regular intervals, eliminating the need for manual payments and reducing the risk of delays.

  1. Don’t settle loans via credit cards

People often choose to pay off their credit card debt by contacting the bank and requesting a settlement that allows them to close the debt for a lower amount than the actual owed sum.

While banks may sometimes grant such requests, the settlement will appear on the credit report and can have a negative impact on the credit score, as well as the bank’s willingness to provide new credit.

  1. Keeping a low credit utilization ratio

To raise your credit score, it is advisable to keep your credit utilization ratio under 30%. This strategy has proven to be highly effective in India for enhancing your credit score within a 30-day period. For example, if you have a credit limit of 2 lakh, it is advisable not to spend more than 60,000. This will help you improve your credit score.

  1. Review your credit history frequently throughout the year:

Make sure to regularly check your CIBIL score and report for any irregularities.  CIBIL may occasionally make mistakes when updating your records, such as adding incorrect information to your report or recording details late. Sometimes, a debt that you have repaid may not be updated on your credit report, which can have a negative impact on your credit standing. If you come across such errors, it is important to rectify them immediately.

  1. Keep the borrowing to a minimum

If you apply for too many loans or constantly approach the limit on your credit card, your credit score is likely to suffer. These activities demonstrate credit-hungry behavior, which can negatively impact your score. The best course of action is to avoid taking out loans unless absolutely necessary and to refrain from exceeding your credit card limits.

Reason for Low CIBIL Score 

A poor CIBIL score can be caused by a variety of factors. A borrower’s credit score can suffer as a result of their own mistakes, as well as mistakes committed by institutions. Typically, bank errors comprise of providing inaccurate details of a borrower to CIBIL and neglecting to keep records up to date, among other possibilities.

The key factor influencing a person’s CIBIL score is their own behavior. Borrowers’ credit ratings may be affected by how they manage their finances. Borrowers’ credit ratings typically deteriorate as a result of their past behavior. Borrowers often make the following mistakes:   

  • Outstanding Credit Card Balance – Some borrowers choose to only pay the minimum amount due on their credit cards each month, resulting in an outstanding balance. However, they may not be aware that this practice can have a negative impact on their credit score. 
  • Too Many Loans/Credit Cards -When a borrower applies for numerous loans or credit cards, each time a bank analyzes their credit record or score to process the application, it is considered a hard inquiry. Having a high number of these inquiries can potentially lead to a lower credit score.
  • High credit usage-Utilizing more than 30% of one’s credit limit lowers their credit score as it indicates a significant dependence on credit.
  • Delay in repayments -If a borrower misses an EMI payment, it will be reflected in their CIBIL report, resulting in a lower credit score. Repayments play a crucial role in determining one’s credit score.


By paying attention to the factors listed above, you can quickly boost your credit score. However, it is highly recommended that you develop solid financial habits to ensure a long-term positive impact on both your budget and credit score. A good credit score indicates that you are a responsible borrower who consistently makes payments on time. However, solely focusing on short-term goals will not help you build a solid credit history. Lenders like ZapMoney provide straightforward loans to borrowers with good credit.


Ajay Deep

Ajay Deep is a young enthusiast who Loves Chandigarh and is always eager to make this beautiful city even more beautiful. A Mechanical Engineer By Chance and Working in an IT MNC by Choice. A Writer, Photographer and a Budding Entrepreneur. A Designer, Developer and Digital Marketing Expert. In brief : A Jack of All Trades and Master of Few :) You may reach Ajay Deep at ajay@chandigarhmetro.com
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