Maintaining a good CIBIL score is essential if you’re looking to get approved for loans, credit cards, or other financial products. A high CIBIL score tells lenders that you’re financially responsible, which can improve your eligibility and help you get better interest rates. Here, we’ll explore practical tips on how to boost your CIBIL score quickly.
Why is a good CIBIL score important?
A good CIBIL score not only helps with loan approvals, but also allows access to credit at competitive interest rates. This score reflects your creditworthiness, based on your credit history, debt repayment habits, and overall financial discipline.
If your score is low, don’t worry: there are several ways to improve it quickly.
1. Check your credit report regularly
The first step to improving your CIBIL score is to check your credit report. Checking your report helps you identify any errors, such as incorrect personal details or incorrectly reported overdue payments, that could negatively affect your score. If you spot any discrepancies, report them to CIBIL immediately so they can be corrected.
Quick Tip: Check your report every three to six months to stay up to date and catch errors early.
2. Pay your bills on time
Timely payment of debts and bills is one of the biggest factors affecting your CIBIL score. Late payments, especially for credit cards or loans, can quickly drag down your score. To avoid missing due dates, set reminders or enable automatic debits to pay your bills on time.
Quick Tip: Prioritise high-impact debts, such as credit card bills and monthly loan installments, to maintain a positive credit history.
3. Reduce your credit utilization ratio
A high credit utilization ratio can negatively impact your CIBIL score. Try to keep your credit utilization below 30% of your available credit limit. For example, if you have a credit card limit of ₹1 lakh, try to keep your monthly usage below ₹30,000.
Quick tip: If you frequently exceed the 30% limit, ask your bank for a credit limit increase.
4. Avoid frequent loan or credit applications
Every loan or credit card application generates a hard inquiry on your credit report. Multiple inquiries in a short period can signal to lenders that you are credit-hungry, which can lower your CIBIL score. Space out your applications to avoid a negative impact.
Quick tip: If you must apply for credit, make sure you have a stable repayment plan.
5. Pay off outstanding debts
Paying off outstanding debts, especially high-interest credit card balances, can immediately improve your score. If you have multiple debts, consider paying them off systematically, focusing on high-interest debts first. This not only reduces your credit burden, but also reflects positively on your credit report.
Quick Tip: Start with the “debt snowball” or “debt avalanche” method to pay off debts effectively.
6. Keep old accounts open
The length of your credit history contributes to your CIBIL score. If you have had a credit card or loan account for a long time, keep it open even after paying off the balance. Old accounts provide a longer credit history, which is beneficial for your score.
Quick Tip: Don’t close accounts unless necessary, as longer credit histories generally improve your score.
7. Diversify your credit portfolio
Having a mix of secured (e.g. home loan, car loan) and unsecured (e.g. credit cards, personal loans) credit shows lenders that you can manage different types of credit responsibly. A balanced credit portfolio can have a positive impact on your CIBIL score over time.
Quick Tip: Consider a small secured loan if you currently only use credit cards.
8. Consider a secured credit card
If your score is low or you don’t have a credit history, consider applying for a secured credit card. These cards are backed by a fixed deposit, making it easier to get approved. Using a secured credit card responsibly can help you build or repair your credit score.
Quick Tip: Make small purchases and pay off the balance in full each month to build a positive credit history.
Conclusion
Improving your CIBIL score quickly is possible with disciplined financial habits and strategic planning. Start by checking your credit report, paying bills on time, and keeping your credit utilization low. Avoid applying for credit frequently and work on clearing your outstanding debts. By following these steps, you can increase your CIBIL score and access better financial opportunities.
