How to increase your CIBIL Score: 5 smart tips that works

How to increase your CIBIL Score: 5 smart tips that works

Five simple steps on how to increase CIBIL score and improve your chances of getting better loan interest rates
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Key takeaways

Improving your CIBIL Score can increase your chances of loan approval and help you access better borrowing terms. Regularly reviewing your credit profile and following responsible credit practices can support long-term financial health.


  • Pay EMIs and credit card bills on time.
  • Keep credit utilisation within reasonable limits.
  • Clear outstanding debts whenever possible.
  • Review your credit report regularly and report any errors.
  • Maintain a healthy mix of secured and unsecured credit.

A consistent approach to managing credit can help strengthen your credit profile and improve your financial opportunities over time.

Your CIBIL score plays a key role when lenders decide whether to approve your loan application. If you are wondering how to increase CIBIL score, improving it before applying can help you secure faster approvals and better interest rates. A steady CIBIL score increase can also reduce your overall borrowing cost and improve your financial credibility. To understand your current standing, regularly check your CIBIL score and review your credit profile. You can also explore whether you have a pre-approved loan offer and the interest rate available to you.


Here are five practical ways to support a consistent CIBIL score increase and learn how to increase CIBIL score effectively for better loan opportunities.


With a Bajaj Finance Personal Loan, you can get the funds within 24 hours* of approval. Check your offer in just 2 steps and apply online to get our loan.

*Terms and conditions apply.

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What is a good credit score?

A credit score of 650 or above is generally considered good and may improve your chances of loan approval and favourable interest rates. Maintaining a good credit score requires timely repayment of EMIs and credit card bills, keeping credit utilisation within limits, avoiding multiple loan applications in a short period, and reviewing your credit report regularly for accuracy. Consistent and responsible credit behaviour can help strengthen your credit profile over time.

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5 steps to improve your credit score for personal loan

  • Clear all your outstanding debt

    Having outstanding debt shows up on your CIBIL report as a negative factor. As long as you still owe money, it will drag down your credit score. The good news is that the moment you clear your debt, your score starts recovering. To clear your outstanding debt faster, you have two options: either repay your debt within your chosen timeline through regular EMI payments, or make prepayments to close the loan early. Using credit responsibly and paying off what you owe is one of the fastest ways to improve your CIBIL score.


    Additional read: Personal loan for low CIBIL score

  • Pay your EMIs on time

    Just making EMI payments isn't enough – you have to make them on time. If you miss even one payment or pay late, it will pull down your CIBIL credit score. Here's why: every delayed EMI payment is recorded in your CIBIL report with details about how many days you were late. This history stays on your record and affects how much lenders trust you.


    The best way to ensure on-time payments? Set up an automatic transfer from your bank account directly to your lender. This way, you don't have to remember anything – the money transfers automatically on the due date. Just make sure you always have enough money in your account for the transfer. This approach ensures you never incur a bounce charge and helps you continuously improve your CIBIL score.

  • Limit your credit utilisation

    Credit utilisation means how much of your available credit you're actually using. When you use too much credit, it sends a red flag to lenders. They think you're living beyond your means – that you can't manage your money within your income. This hurts your credit score.


    The smart approach: only use as much credit as you can actually repay. A good rule of thumb is to keep your credit usage below 50% of your total credit limit. For example, if your credit card limit is Rs. 1 lakh, try to spend no more than Rs. 50,000. You can also take practical steps like paying off your credit card balance in full every month instead of carrying a balance, and avoiding using your credit card up to the maximum limit regularly. These habits show lenders you're responsible with credit.


    Additional read: CIBIL score calculation

  • Report discrepancies in your credit report, if any

    Mistakes happen. Sometimes your credit report might show incorrect information that can hurt your CIBIL score – for instance, a payment you actually made might not be reflected in the report, or there might be accounts you don't recognise. These discrepancies can seriously damage your chances of getting a personal loan approved.


    That's why it's crucial to monitor your credit score regularly and address any errors without delay. Check your report at least once or twice a year. If you spot any mistakes, report them immediately and ask for a correction. Bajaj Finance offers an easy way to check your CIBIL score and review your complete credit report. A consistent check helps you maintain a strong credit profile and improves your chances of getting loan approval.

  • Borrow a mix of credit

    This is an important step that many people overlook. If you don't borrow any credit at all, you won't have a credit score – lenders won't know anything about how you handle borrowed money. On the other hand, if you borrow only one type of credit (like only personal loans or only credit cards), it doesn't show lenders that you can handle different types of credit responsibly.


    To improve your CIBIL score, aim for a healthy mix of credit. This means taking both secured credit (like a home loan or car loan where you pledge something as guarantee) and unsecured credit (like personal loans or credit cards where you don't pledge anything). When you borrow different types of credit and repay all of them on time, it proves to lenders that you're responsible with all kinds of borrowing. This establishes a strong credit history and improves your score significantly.

As you work on improving your CIBIL score, keep these points in mind:


  • Avoid ad-hoc financial decisions: Don't make sudden, unplanned financial moves like taking multiple loans quickly. Always try to take and use credit responsibly to maintain a good CIBIL credit score.
  • Use credit responsibly: Always try to take and use credit wisely. Borrow only what you need and can repay comfortably.
  • Be patient with the process: Once you start implementing these measures, remember that it may take around 6 months to a year for your score to show noticeable improvement. Improvement happens gradually, so stay consistent.
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Which factors have the biggest impact on a CIBIL score?

If you want to know how to increase CIBIL score, understanding the factors that affect it is important. Your repayment history, credit utilisation, credit mix, and borrowing behaviour have the biggest impact on your score. Managing these factors responsibly can help improve and maintain a healthy credit profile over time.


  • Payment history: Paying EMIs and credit card bills on time helps build a positive credit history.
  • Credit utilisation: Keeping credit usage within reasonable limits can support a healthy score.
  • Credit mix: A balanced mix of secured and unsecured credit may strengthen your credit profile.
  • Loan applications: Applying for multiple loans or credit cards within a short period may affect your score.
  • Credit report accuracy: Regularly checking your credit report helps identify and correct errors quickly.
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How long does it take to improve a CIBIL score?

The time required for a CIBIL score increase can vary depending on your financial habits and the issues affecting your credit profile. In many cases, you may start to increase CIBIL score within 3 to 6 months by making timely payments, reducing outstanding balances, and avoiding new debt. However, rebuilding a significantly low score or correcting major defaults may take 12 to 24 months or longer.


Consistently practising responsible credit behaviour is the most effective way to improve CIBIL score over time. Paying EMIs and credit card bills on time, maintaining a low credit utilisation ratio, and regularly monitoring your credit report can help you achieve steady progress and strengthen your eligibility for future loans.


Improving your CIBIL score is a gradual process and may take anywhere from 3 to 6 months or more, depending on your credit behaviour. If you want to increase your CIBIL score fast, here's what to prioritise:


 

  • Make all your EMI payments on time – this is the most important factor
  • Reduce any outstanding debt as quickly as possible
  • Avoid applying for new credit applications frequently
  • Keep your credit utilisation ratio low


 

⏱️ Timeline tip: Consistent positive actions can help speed up improvement. Some people see improvement in 3 months, while others take 6 months or longer. The key is being consistent and patient.

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Conclusion

Your CIBIL score plays a crucial role when applying for a personal loan, as it reflects your creditworthiness and repayment behaviour. Learning how to increase CIBIL score in Bajaj Financeand maintaining responsible financial habits can significantly improve CIBIL score over time. A higher score improves your chances of faster approval, better interest rates, and more favourable loan terms. Conversely, a low score may reduce approval chances or result in higher borrowing costs in the long run.
 

  • Pay dues on time: Ensure timely payment of your EMIs and credit card bills.
  • Clear outstanding debts: Reducing debt boosts your creditworthiness.
  • Maintain a healthy credit mix: A balanced combination of secured and unsecured credit is crucial.
  • Lower credit utilisation: Keep your credit card usage below 30% of your limit.

  • Regularly review your credit report: Check for discrepancies and get them rectified promptly.
    Adopting these practices can improve your financial profile and ensure you qualify for competitive loan offers. Having a good CIBIL score not only enhances your loan eligibility but also significantly reduces your interest burden, saving you money over time.


    Start implementing these habits to see a noticeable improvement in your CIBIL score over the coming months. Need financing? Explore applying for a personal loan online to benefit from minimal documentation, instant approval, and attractive interest rates.

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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term (Dropline) Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 36 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of interest per annum

10% to 30% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi Loans –Up To Rs 1,999 To Up To Rs 18,999/- (Inclusive Of Applicable Taxes)

Will be deducted upfront from loan amount.

Bounce charges

Rs. 700 to Rs. 1,200/- per bounce

“Bounce charges” shall mean charges for (i) dishonor of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonor of payment mandate or non-registration of the payment mandate or any other reason.

Part-prepayment charges

Full Pre-payment:

  • Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment

  • Flexi Term (Dropline) Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount, as on the date of full prepayment.

  • Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount, as on the date of full prepayment.

Part Pre-payment

  • Up to 4.72% (Inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment.

  • Not Applicable for Flexi Term (Dropline) Loan and Flexi Hybrid Term Loan.

Penal charge

Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term (Dropline) Loan:

Up to 0.295% (Inclusive of applicable taxes) of the Dropline limit (as per the repayment schedule) on the date of levy of such charges.


Flexi Hybrid Term Loan:

Up to 0.472% (Inclusive Of Applicable Taxes) Of The Dropline Limit During Initial Tenure. Up to 0.295% (Inclusive Of Applicable Taxes) Of Dropline Limit During Subsequent Tenure

Credit guarantee scheme feeUp to 1.18% p.a. (pro-rated daily till 31st March) (inclusive of all applicable taxes) of the loan amount
Credit guarantee scheme renewal feeUp to 1.18% p.a. (inclusive of all applicable taxes) on the outstanding loan amount as on April 01 of the subsequent Financial Year.
*Renewal Fee to be collected only for 3 subsequent financial years.
 
**If the Remaining Tenure is less than 12 months, the CG Fee in subsequent years shall be charged prorated.

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