Your credit score is a crucial factor that influences your financial health and the ability to access credit at favourable terms. Whether you are planning to buy a house, lease a car, or apply for a personal loan, a good credit score can significantly impact your borrowing capacity. If your credit score is not where you want it to be, do not worry; there are several effective strategies to improve it fast. In this article, we will explore some essential tips to enhance your credit score and achieve a healthier financial future.
Why should you check your credit report regularly?
Regularly checking your credit report helps you identify errors that may affect your credit score and gives you an opportunity to dispute inaccurate information. You can review your reports from the four major credit bureaus in India: CIBIL, Equifax, Experian, and CRIF High Mark. Each bureau provides one free credit report every year. If you find an incorrect late payment, unfamiliar account, or other error, raise a dispute directly with the relevant credit bureau online. Corrections typically reflect within 30–45 days. Bajaj Finance Credit Pass can also provide monthly CIBIL Score updates to help you monitor changes.
How does paying bills on time improve your credit score?
The fastest way to increase your credit score quickly is to maintain a consistent repayment record, as payment history accounts for approximately 35% of your CIBIL score. Set up auto-debit for loan EMIs and credit card bills, and use payment reminders to avoid missed due dates. These credit score improvement tips can help you maintain a reliable repayment pattern. Missing even one EMI can reduce your CIBIL score by 50–100 points, and the record can remain on your report for 36 months. Regular, timely payments can support gradual credit score improvement.
What is the ideal credit utilisation ratio for a good credit score?
Keep your credit utilisation ratio below 30% of your available credit limit, with utilisation below 10% being preferable. Lower utilisation shows that you are using a smaller portion of your available credit. If you want to fix your credit score fast, reducing outstanding balances can be one of the quickest steps to take.
| Utilisation level | CIBIL score impact | Recommended action |
|---|
| Below 10% | Excellent, score boost likely | Maintain this level |
| 10%–30% | Good, minimal negative impact | Keep utilisation within this range |
| 30%–50% | Moderate, score may be affected | Reduce spending or request a higher limit |
| Above 50% | High risk, significant negative impact | Pay down balances promptly |
Why should you avoid applying for multiple loans at once?
Avoiding multiple loan applications at once can help protect your CIBIL score, as each hard enquiry can temporarily lower your score. A hard enquiry occurs when a lender checks your credit report for a loan or credit card application. A soft enquiry, such as checking your own score through Bajaj Finance Credit Pass, does not affect your score. Each hard enquiry can reduce your score by approximately 5–10 points and can remain on your credit report for 12 months. Limiting unnecessary applications is one of the practical credit score improvement tips to consider.
How does becoming an authorised user help your credit score?
Becoming an authorised user on the right credit card account can support your CIBIL score goals when the primary cardholder has a strong repayment record and low utilisation. Ideally, the primary cardholder should have a CIBIL score of 750 or above and credit utilisation below 30%. Their positive credit behaviour may be reflected in your credit profile. However, missed payments or high utilisation on the account can also affect your report. Choose an account holder with a strong repayment history before becoming an authorised user.
Learn more about boosting your credit score.
Why paying only the minimum balance slows your credit improvement
Paying only the minimum amount on a credit card balance can prolong repayment and increase the interest you pay. For example, a Rs.50,000 balance at 36% p.a., with only the minimum payment of around 5%, could take over three years to clear and cost more than Rs.30,000 in interest. Revolving credit can continue to accrue interest while a balance remains outstanding. To increase your credit score quickly, aim to pay the full outstanding balance whenever possible.
What is a healthy credit mix and why does it matter?
A healthy credit mix can support your CIBIL score, with credit mix accounting for approximately 10% of the score. Having different types of responsibly managed credit can demonstrate experience with both secured and unsecured borrowing. These credit score improvement tips should complement timely repayments and controlled credit utilisation.
| Credit type | Secured or unsecured | Example |
|---|
| Home loan | Secured | Bajaj Housing Finance |
| Personal loan | Unsecured | Bajaj Finance personal loan |
| Credit card | Unsecured | Standard credit card |
| Gold loan | Secured | Bajaj Finance Gold Loan |
| Auto loan | Secured | Car or two-wheeler loan |
Why keeping old credit accounts open helps your CIBIL score
Keeping older credit accounts open can support your CIBIL score by maintaining a longer credit history. Credit age accounts for approximately 15% of the CIBIL score, so older accounts can contribute to the length of your credit history. Closing a five-year-old account may reduce your score by 15–30 points, according to the brief. If you are considering how fast you can improve your credit score, avoid closing older zero-balance accounts unless their annual fees outweigh their benefits.
How to negotiate with creditors to protect your credit score
If you are struggling to meet repayments, negotiate with creditors before you default to explore options such as a revised repayment plan. Early communication can help you manage outstanding obligations and protect your CIBIL score from further repayment issues. However, know the difference between a closed and settled account. A closed loan means the full amount was repaid, while a settled account means the lender accepted less than the amount due. A settled status can remain on your CIBIL report for up to 7 years and may affect future credit applications. This is an important consideration when trying to fix my credit score fast.
If you are looking for expert guidance in building a good credit score, consider the Bajaj Finance Credit Pass. This innovative toolkit offers personalised insights into your credit health in real-time, monthly CIBIL Score updates, and interactive tools that help you improve your credit profile effectively. By using Bajaj Finance Credit Pass, you can take control of your credit health and pave the way for a brighter financial future. Sign up today for free and unlimited access to all Credit Pass benefits for a full year*.
