How to Improve Your Credit Score, Easy and Fast Way

To secure a loan from any bank or NBFC, one must have a good CIBIL score and by extension, a good credit score. Individuals with poor scores face significant difficulties in obtaining loans; furthermore, banks charge higher interest rates in such cases.

In these times of rising costs, one often needs to take out a loan to meet financial requirements. Apart from public and private sector banks, many Non-Banking Financial Companies (NBFCs) also offer loans. However, having a good CIBIL score is essential for securing a loan; a good score makes it easier to obtain a loan at the lowest possible interest rates. Let us look at some ways to improve your credit score.

How to increase your CIBIL score fast

There is no instant way to increase your CIBIL score. The fastest way to strengthen your credit profile is to address overdue payments, maintain low credit utilisation

You can improve your CIBIL score by:

• Paying EMIs and credit card bills on time.
• Keeping your credit utilisation below 30–40% of your available limit.
• Avoiding multiple loan or credit card applications within a short period.
• Checking your credit report regularly and reporting any errors for correction.

Credit Score Improvement Tips

A good CIBIL score helps you secure loans at lower interest rates, whereas a poor score can make it difficult to obtain a new loan. If you plan to take out a loan in the future, maintaining a good CIBIL score is crucial.

Here, we share some of the best ways on how to increase your credit score.

• Check your credit report periodically and identify any errors that could affect your score.
• Pay your bills on time and set regular reminders to ensure this.
• Keep credit utilization low and aim to use less than 30 percent of your available credit.
• Avoid making multiple applications within a short period.
• Keep track of your loan amount and repay it on time.

What should you do to maintain your credit score?

Improving a credit score takes a considerable amount of time. If you have taken a loan and pay your monthly installments on time, your credit score remains healthy. Conversely, if an EMI bounces or a payment is delayed, your credit score will drop by a few points.

Therefore, it is essential to maintain a sufficient balance in your bank account by the scheduled date for the installment. To avoid late payments or missed installments, you should set up auto-pay or reminders.

Why is it important to make credit card payments on time?

If you have obtained a credit card to meet your needs, making timely payments is essential. This helps maintain a good credit score. Repeatedly failing to make credit card payments can cause your CIBIL score to drop below 600, which could lead to significant difficulties in securing loans in the future.

Why shouldn’t you close your oldest credit account?

Banks consider customers with a long or established credit history—and a record of timely payments—to be more trustworthy. Therefore, if you have an old credit account, do not close it; maintaining it helps your credit profile and makes it easier to secure loans.

Is it important to avoid taking out loans repeatedly?

When you check your own credit score, it is known as a ‘soft inquiry.’ This does not significantly impact your credit score. However, when you apply for a loan or a credit card, banks or NBFCs check your credit score—a process known as a ‘hard inquiry.’ Consequently, frequently checking your credit score or applying for loans repeatedly can negatively affect your CIBIL score.

Here is how to check your CIBIL score for free.

To check your CIBIL score for free, you need to follow a few simple steps. We have listed them below:

• Visit the official CIBIL website at https://www.cibil.com.
• Now, click on ‘Get your CIBIL Score’.
• Click on ‘Click here’ to get your free annual CIBIL score.
• Enter your name, email ID, and password. Attach an ID proof (Passport number, PAN card, Aadhaar, or Voter ID). Then, enter your PIN code, date of birth, and phone number.
• After this, click on ‘accept and continue’.

How to improve your credit score in 30 days?

To improve your credit score, keep your credit utilization below 30%. If you have an outstanding balance on your credit card, paying it on time has a direct impact on your credit score. Improving your credit score takes patience, consistency, and financial behaviour.

FAQs