Why 750 is key to your financial well-being A CIBIL score of more than 750 is great and will improve your chances of getting loans at lower interest rates. Banks consider it a sign of low risk in the majority of situations. If your score is low due to past defaults, delayed payment of EMIs, or high credit card usage, don't worry—you can fix this. However, it requires discipline in the medium term. The next six months are crucial if you are thinking of applying for a home or personal loan, or for upgrading your credit card.
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Pay all EMIs and credit card dues on time Your payment history contributes to the largest portion of your CIBIL score—around 35%. A single missed payment can cut your score deeply. Fix auto-debit instructions for EMIs and pay your credit card bill in full at the end of each month. A single delayed payment can impact your score for a few months. Strive to have a history of zero defaults for the next two quarters to observe consistent improvement.
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Reduce your credit utilisation ratio A high credit utilization ratio—such as using, say, ₹70,000 of a ₹1,00,000 limit on your credit card—shows dependence on credit and reduces your score. Try to keep the usage at or below 30% of the total limit on cards. If you are getting close to that, request an increase in limit rather than cutting spending. It won't hurt your score and makes you appear more creditworthy. Better ratios usually appear within one or two reporting periods.
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Don't comparison shop for several loans at once Every time you apply for a loan or credit card, lenders check your credit report, creating a "hard inquiry". Excessive hard queries in a short span of time can show credit-starved behaviour and lower your score. Avoid comparison shopping for loans from many lenders. When you do need to get a loan, compare online and apply carefully. Limit yourself to one or two hard inquiries every few months.
Verify mistakes in your credit report Your CIBIL report can have errors—like closed loans reflected as active, or late payments made against you that are not rightfully so. Such issues tend to decrease your score erroneously. Get a free credit report from the internet and verify it carefully. In case you spot errors, raise a dispute with CIBIL. It takes 30-45 days for the changes to happen, so do this at the start of your six-month period.
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Keep old accounts open and active Length of credit history counts. If you have had a card for 10 years, don't cancel it even if you use it seldom. Long accounts with a good payment history help increase your score. Closing them lowers your average age of credit and can decrease your score. Make small purchases on old cards and pay off in full—it indicates good credit behaviour.
