How to improve your CIBIL score (and why it matters)

Why your CIBIL score matters Your CIBIL score is a three-digit number (300–900) that lenders use to judge how reliably you repay. A score of 750 or above unlocks faster approvals, higher loan amounts and lower interest rates. Below ~650, you may face rejections or pay a premium for years. Improving it is one of the highest-return financial habits there is.

What actually drives the score - Payment history (~35%): paying every EMI and card bill on time, in full. - Credit utilisation (~30%): how much of your card limit you use. - Credit age & mix (~25%): longer history and a healthy mix of loans and cards. - New enquiries (~10%): how often you apply for fresh credit.

The habits that lift it - Never miss a due date. Automate at least the minimum payment so a slip-up never hits your history. This is the biggest single lever. - Keep utilisation under 30%. If your card limit is ₹1 lakh, try to keep the balance below ₹30,000. Paying down before the statement date helps. - Don't close your oldest card. A long credit history helps; closing old accounts shortens it and can raise utilisation. - Space out applications. Each loan or card application triggers a "hard enquiry" that dents the score briefly. Avoid applying for several at once.

The mistakes that quietly hurt - Paying only the minimum due on cards month after month (interest piles up and utilisation stays high). - Being a guarantor or co-applicant on a loan that turns bad — it reflects on your report too. - Ignoring errors on your report — a wrongly recorded default can cost you dozens of points.

Check and fix your report Pull your credit report at least once a year and dispute any inaccuracies with the bureau. Corrections can lift your score meaningfully with zero effort on the spending side.

Be patient — it compounds There is no overnight fix. Consistent on-time payments and low utilisation typically show results in 3–6 months, and a genuinely strong score in a year or two. Before applying for a big loan, check where you stand and estimate how much you could borrow, so there are no surprises at the bank.