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How to improve your credit score in 5 quick steps

  • Highlights

  • Credit score indicates the credit-worthiness of borrowers

  • Pay your EMIs and bills on time to improve your score

  • Having a good credit history makes you a reliable borrower

  • A healthy mix of loans helps in developing trust with lenders

Today, financing has become easier than ever before. With a high credit score, getting your loan approved is now easier and quicker. However, individuals with poor credit history and practices find themselves struggling to secure loans because lenders consider the individual’s credit score before lending.

Check your cibil score for free
You can make this process easier with Bajaj Finserv. With pre-approved offers on home loans, business loans, personal loans and EMI Network, the process of availing finance is made seamless and instant. Know your pre-approved offers by sharing a few basic details here.

What is a credit score?

Credit score is a three-digit number created by a mathematical algorithm which is formulated to ascertain how credit worthy a borrower is. It takes in account your credit history and payment practices to predict the likelihood of future repayments.

In India, CIBIL is reputed as the foremost agency when it comes to an individual’s credit report. While the overall score can range from 300 to 900, good credit scores are generally considered from 700 to 900.

How important is a credit score?

A good credit score creates better borrowing opportunities when you’re making a big-ticket purchase such as investing in a new house, car or your child’s education and helps you borrow funds in future. It makes you eligible for instant personal loan upto 25 lakhs from India’s best NBFC like Bajaj Finserv at better terms.

How to improve my credit score?

In case you have a poor score i.e. a score that’s lesser than 600, you can undertake the following measures to bolster your score easily:
- Timely payment of debts with no defaults
Lack of repayment or delayed payment will immediately reflect in the individual’s credit score. We recommend making your EMI or bill payments on time every month to steer clear of bad credit.

Pro tip: Consider using auto-debit functionality to ensure your bills are paid on time.

- Having a good credit history
A good payment history is the most important aspect when calculating a credit score. As potential lenders are unaware of your repayment practices, they can consider it risky or reject your application based on your inexperience with credit.

Pro tip: Making multiple loan applications or having several credit accounts can negatively affect your score. It’s best to avail credit and repay the required amounts on time.

- Crossing the credit limit
Utilizing your credit card limit monthly indicates a proclivity to spend more. Thus, it can impact your ability to pay instalments and your credit score. Keeping a tab on your spending will translate to a low balance and good credit.

Pro tip: Clear off the outstanding balances on your credit card to give your CIBIL score a boost.

- A healthy mix of unsecured and secured loans
Maintaining a balance between unsecured and secured loans make you a more viable choice for lenders. The secret to maintaining a good credit score in India is to develop trust with on-time payments.

- Watch out for any incorrect listing in your credit report
Be sure to check up on your credit history to rectify bad credit immediately. Additionally, in the case of joint accounts, it is essential to keep a tab of the expenses being made on a joint account to keep a healthy score for both the parties involved.

Most credit rating bureaus offer to calculate your credit score for free at least once a year. You can check CIBIL score for free by simply adding some basic details. Keep track of your score and make adjustments as necessary.

The content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.

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Where to check your CIBIL score


Where to check your CIBIL score