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How to quickly raise credit score: Check simple tips for high credit score
31 January, 2025 | 11:01 IST

A personal loan could become quite helpful to meet unexpected financial needs, mostly in emergencies. Access to instant loans has become quite convenient these days with the emergence of digital lending platforms. Most of the banks and Non-banking financial companies (NBFCs) offer digital loans based on income and credit score of the borrower. So, it’s crucial to have a healthy credit profile and a high credit score to get quick approval for personal loans.

Credit score, or CIBIL score, is an indicator of the creditworthiness of a borrower. The lenders give priority to borrowers with a healthy credit score while approving various credit instruments like a personal loan or a credit card. A high credit score can be beneficial for getting faster approvals for a personal loan.

It could be difficult to avail a personal loan with a low credit score. But, you can improve your credit score by understanding how credit scores work and the ways to improve your credit worthiness. Let’s take a look at effective steps for credit score improvement.

Table of Contents

What is a credit score?
Check your credit score
How to quickly raise credit score?
Summary

What is a credit score?

In simple terms, credit score is a three-digit number providing lenders an idea about a person's creditworthiness. Credit scores in India range from 300 to 900.

A healthy credit score increases the chances of getting approval for a personal loan. With a high credit score you can even avail a loan at lower interest rates and favourable terms and conditions. Your credit score depends primarily on the history of loan repayments and credit card dues as well as types of borrowings and usage of credit facilities.

Good credit score

According to the ‘Empowering Financial Freedom: The Rise of Credit Self-Monitoring in India’ report by TransUnion CIBIL, released in August 2024, credit scores are categorised as:

Subprime - 300 to 680

Near Prime - 681 to 730

Prime - 731 to 770

Prime Plus - 771 to 790

Super Prime - 791 to 900

However, the categorisation of credit score may differ depending on the credit agencies.

Check your credit score

It’s advisable to keep a track of your credit score regularly to avoid any negative reporting and discrepancies. You can easily check your credit score for free by visiting multiple platforms or even by visiting the official websites of the credit bureaus. Besides this, you can also take help of Moneycontrol app that provides free access to all to check their credit scores. Apart from tracking your credit score, you can also apply for personal loans up to Rs 15 Lakhs from eight lenders in an entirely digital process. The interest rates start at as low as 12% per annum.

ALSO READ: Credit Report: A step-by-step guide to read credit score report in detail

How to quickly raise credit score?

Here are a few credit score tips to enhance your credit profile. With these simple measures you can improve your credit score for quick personal loan approvals and other financial benefits.

Make payments on time: Make sure that all the payments for your existing loans and credit card bills are made within the due dates. This significantly boosts your credit score.
Clear outstanding dues: Those who have been marked a defaulter should reach out to their lenders and offer to close the loan as soon as possible. This allows you to change the status of ‘default’ loan to ‘closed’. Clearing the outstanding dues improves your credit score significantly.
Tracking credit utilisation ratio: It is often advisable to maintain a low credit utilisation ratio, which refers to the percentage of available credit that a person is using at any given time. Ideally, this should be kept below 30%. For example, people with a total credit limit of Rs 1 lakh should make sure their outstanding balance remains under Rs 30,000.
Verify credit report: Keep a track of your credit report and verify it from time to time to check discrepancies in it. If you find any, raise the issue with the credit bureau and get it rectified immediately.
Good mix of credit types: It is better to have a mix of credit types like secured loans (like home loans) as well as unsecured credit products like credit cards. A healthy balance between these indicates responsible credit management, thereby contributing towards a better credit score.
Apply for smaller loans: Once you are in a stable financial situation, start rebuilding your credit history through applying for smaller loans.
Avoid multiple loans in a short period: It’s advisable to refrain from applying for multiple credit products in a short period as it can have a negative impact on the credit score. The lenders might consider this as a sign of financial distress.

In conclusion, improving credit score needs consistent efforts and meticulous planning. It depends on your financial discipline and money management. With a few simple steps you can improve your creditworthiness, paving the way for quick approval for personal loans.

You can check the credit score for free and apply for personal loans up to Rs 15 Lakhs from eight lenders through the Moneycontrol app. These loans can be availed in a completely digital process within minutes and the interest rates for the loans start at 12% per annum.

Summary

A good credit score is key to quick personal loan approvals and better financial opportunities. Learn more on how to improve your creditworthiness fast and unlock benefits like lower interest rates and quicker approvals.

Disclaimer

This piece/article was written by an external partner and does not reflect the work of Moneycontrol's editorial team. It may include references to products and services offered by Moneycontrol.

About the Author

Fintech

Stay updated on the latest personal finance trends, with a focus on products like credit cards, credit score, personal loans, fixed deposits, and more

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