12 Tips On How To Improve Your CIBIL Score

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Monika Ahuja
Monika Ahuja
I have a specialization in finance but I have written for several domains including real estate, automobile, home decor, e-commerce etc. I worked in sales for over 4 years, before choosing to become a content writer. As a writer, I have worked closely with several national and international brands and have handled their social media and website content for over 3 years. With my diverse experience in the field of writing, I am looking forward to creating some engaging content for my readers.

CIBIL, which stands for Credit Information Bureau (India) Limited (CIBIL) is one of the four most popular credit rating companies licensed by the Reserve Bank of India. They maintain the credit files of over 600 million individuals and 32 million businesses and offer them a rating based on their credit payment history across all loan types. It is important for one to understand how to improve CIBIL score, as this score determines an individual’s creditworthiness. 

This three-digit number also called the CIBIL score, measures a person’s ability to repay loans and credit card bills on time. The score is calculated based on the person’s credit history, which includes information about their credit cards, loans, and other financial activities. 

Lenders and financial institutions use the CIBIL score to determine whether an individual is eligible for a loan, credit card, or other financial product. CIBIL scores range from 300 to 900, with 300 being the lowest score and 900 being the highest. A higher score indicates that the individual is more creditworthy, while a lower score indicates that the individual is less creditworthy. Before diving further into the topic, let us first understand how the CIBIL score is calculated.

How Is CIBIL Score Calculated

The CIBIL score is calculated based on several factors, including the individual’s payment history, credit utilisation ratio, length of credit history, credit mix, and recent credit inquiries. Payment history accounts for 35% of the score, credit utilisation ratio accounts for 30%, length of credit history accounts for 15%, credit mix accounts for 10%, and recent credit inquiries account for 10%.

The payment history factor takes into account the individual’s payment behaviour, such as whether they have made timely payments on their loans and credit card bills. Late payments or defaults can negatively impact the CIBIL score. The credit utilisation ratio factor measures the percentage of the individual’s available credit limit that they have used. A high credit utilisation ratio indicates that the individual may be overextended and have difficulty repaying their debts. This can negatively impact the CIBIL score. The length of credit history factor takes into account how long the individual has had credit accounts. A longer credit history generally indicates that the individual is more experienced with managing credit, which can positively impact the CIBIL score.

The credit mix factor takes into account the types of credit accounts that the individual has, such as credit cards, car loans, and home loans. A diverse credit mix can positively impact the CIBIL score. The recent credit inquiries factor takes into account how many times the individual has applied for credit recently. Multiple credit inquiries can negatively impact the CIBIL score, as it may indicate that the individual is in desperate need of credit. Individuals must understand how to maintain a good CIBIL score, as it can impact their ability to access credit products in the future. A low CIBIL score can lead to the rejection of loan and credit card applications, while a high CIBIL score can increase the chances of approval. One should also regularly check their credit report for errors or discrepancies as this could also negatively impact their score.

Your CIBIL score is a crucial factor that determines your creditworthiness and the likelihood of being approved for loans, credit cards, and other forms of credit. Therefore, it is essential to understand how to improve CIBIL score and maintain it in the long run. In this article, we will discuss 12 tips for improving CIBIL scores.

How To Increase And Main Your CIBIL Score

1. Review Your Credit Report Regularly

The first step in improving your CIBIL score is regularly reviewing your credit report. Your credit report contains information about your credit history, including your payment history, credit utilisation, and other factors that determine your creditworthiness. By reviewing your credit report, you can identify any errors or inaccuracies that may be negatively impacting your score. If you notice any errors or discrepancies, you should report them to the credit bureau immediately for correction.

2. Pay Your Bills On Time

One of the most significant factors that determine your CIBIL score is your payment history. Late payments or missed payments can significantly impact your score and reduce your creditworthiness. Therefore, paying your bills on time is essential, including credit card bills, loan EMIs, and other bills. Set up automatic payments or reminders to ensure that you never miss a payment.

3. Keep Your Credit Utilisation Low

Your credit utilisation is the percentage of your available credit limit that you are currently using. High credit utilisation can negatively impact your CIBIL score and make you appear riskier to lenders. Therefore, another way how to increase your CIBIL score is by keeping your credit utilisation low. Aim to use not more than 30% of your available credit limit.

4. Do Not Close Old Credit Accounts

Closing old credit accounts can negatively impact your CIBIL score by reducing the average age of your credit history. The longer your credit history, the better it is for your score. Therefore, it is advisable to keep your old credit accounts open, even if you are not actively using them.

5. Limit Your Credit Applications

Avoid applying for multiple credit products within a short period. Each time you apply for credit, it results in a hard inquiry on your credit report, which can negatively impact your score. Therefore, to improve your CIBIL score, it is essential to limit your credit applications and only apply for credit when you need it.

6. Maintain A Healthy Credit Mix

Having a mix of different types of credit products, such as credit cards, personal loans, and auto loans, can positively impact your CIBIL score. Lenders like to see that you can manage different types of credit products responsibly. However, it is essential to only take on credit products that you can comfortably manage and repay.

7. Check Your Credit Card Balances Regularly

Your credit card balances can significantly impact your credit utilisation and, consequently, your CIBIL score. Therefore, it is essential to check your credit card balances regularly and aim to pay them off in full each month. Thus one of the simplest ways how to improve CIBIL score is by keeping your credit utilisation low and maintaining a healthy credit score.

8. Avoid Settling Your Debts

Settling your debts means negotiating with your creditors to pay less than what you owe. While this may provide temporary relief, it can negatively impact your credit score in the long run. Settled accounts remain on your credit report for seven years, making you appear riskier to lenders. Therefore, it is advisable to repay them in full than settling your debts.

9. Use A Secured Credit Card

It can be challenging to obtain credit products if you have a low credit score or no credit history. In such cases, a secured credit card can be an excellent option. A secured credit card is a credit card that requires a security deposit, which serves as collateral for the credit limit. Using a secured credit card responsibly can build or rebuild your credit history and improve your CIBIL score over time.

10. Avoid Co-Signing For Others

Another way how to improve CIBIL score is by avoiding co-signing for someone else’s loan or credit card. This can negatively impact your credit score if they fail to make their payments on time. Therefore, it is essential to avoid co-signing for others unless you are prepared to repay their debt in case of any default.

11. Seek Professional Help If Needed

Are you struggling with debt and want to know how to maintain CIBIL score? Some people can find it challenging to manage their finances, and in such cases, it becomes essential to seek professional help. A credit counsellor can help you develop a budget, negotiate with creditors, and guide you on managing your finances responsibly. However, choosing a trustworthy credit counsellor is essential to avoid falling prey to scams.

12. Be Patient And Persistent

Remember that improving your CIBIL score is not a quick process, and it requires patience and persistence. It may take several months or even years to significantly improve your score. However, by following the above tips consistently and responsibly managing your finances, you can improve your score over time and maintain it in the long run.


One must understand how to improve CIBIL score as this score is critical for their financial health and stability. A good CIBIL score can help you acquire credit in favourable conditions, whilst a low score might limit your access to credit and increase its cost. The above-mentioned strategies can help you enhance and maintain your CIBIL score in the long run.

You may raise your CIBIL score and attain financial stability by constantly following the suggestions mentioned above and managing your cash wisely. One must also remember that improving and maintaining a CIBIL score is a gradual process, and one must wait for many months or even years to see any substantial improvement in their scores. So, the next time you think,’ How to increase your CIBIL score?’, do not forget to be consistent and committed to appropriate financial management.

Finally, keep in mind that your credit score is a reflection of your financial health and behaviour, not just a number. Maintaining a strong credit score not only improves your access to credit but also positions you for long-term financial success. As a result, it is crucial to prioritise prudent financial management and work regularly to improve your CIBIL score.

FAQs (Frequently Asked Questions):

1. How can I increase my CIBIL score quickly?

There are three ways to increase your CIBIL score quickly. Some of these ways are:

  1. Pay your bills on time: Late payments can negatively impact your credit score. Make sure to pay your credit card bills and loan EMIs on time.
  2. Maintain a healthy credit mix: It is better to have the right combination of secured loans (like home loans and car loans) and unsecured loans (such as personal loans and credit cards) of a long and short tenure to build a good credit score. 
  3. Check your credit report for errors: Regularly check your credit report for errors and dispute any inaccuracies.

2. Is 650 a good CIBIL score?

A CIBIL score of 650 is considered to be a fair credit score in India. A credit score between the range of 670-739 is considered to be a good CIBIL score. While 650 is not a bad score, it may limit your ability to access credit at favourable terms, such as lower interest rates or higher credit limits.

Lenders typically prefer to lend to individuals with good credit scores as it indicates that they have a good credit history and are likely to repay their loans on time. 

3. What are 3 things that will raise your credit score?

Here are the 3 things that one can do to raise their credit score:

  1. Pay your bills on time: One of the most important factors that affect your credit score is your payment history. Make sure to pay your bills, including credit card bills and loan EMIs, on time every month. 
  2. Keep your credit utilization low: Credit utilization is the amount of credit you are currently using compared to your total available credit limit. Keeping your credit utilization ratio below 30% is ideal for a good credit score. Limit applying for new loans if your credit score is already low.
  3. Review your credit report regularly: Errors in your credit report can bring down your credit score. It’s important to review your credit report regularly for any errors. By doing so, you can ensure that your credit report is accurate and up-to-date, which can help boost your credit score.

4. What is the fastest way to raise a credit score?

There is no single “fastest” way to raise a credit score, as it depends on an individual’s specific credit situation. However, if there are any errors in your credit report, then reporting those errors to the credit bureau and resolving them can help you raise your credit score quickly. 

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