Every lender uses different parameters to issue a loan amount to borrower.

The Reserve Bank of India has mandated that all banks should check the CIBIL score of every loan or credit card applicant at the time of evaluation.

The CIBIL report is a detailed document that highlights your entire credit history and record.

CIBIL report includes details of your personal information, contact information, employment history, credit limit on various credit cards, credit balances, and dates on when you opened various accounts.

This CIBIL reports are viewed by various parties or organizations.

If you need to increase your credit score, it won’t happen overnight.

Credit scores take into account your past behavior regarding your credit report, and not just your present actions.

But there are some steps you can take now to start on the path to better credit.

10 Tips That Will Help You Improve Your CIBIL Score and Your Creditworthiness

Need to improve the score will arise only when your CIBIL or credit score is low and you are planning to apply for a new loan or a credit card for your future endeavors.

If your credit or CIBIL score is not good enough then these are the things that you can do to help it improve.

1. Check Your Credit Report


The first thing you should be doing is to check your Credit Reports regularly.  Checking your Credit Report is a good idea because it will tell you two things that are absolutely critical to your credit score.

The first thing will be the loans or credit cards where the defaults or delayed payments exist that have brought down your credit score.

The second thing is, it will tell you is the information that is recorded in the credit report. This helps in fixing the credit score because if you notice that there is negative information about your credits, in the form of defaults or delays in payments, mentioned on the report you can always approach the bank and CIBIL to get the situation corrected.

2.Eliminate Your Credit Card Balance

The second thing you can do is to eliminate those credit card balances.

Only spend as much amount as you can repay within the billing date. By balances, also mean any unpaid dues on loans and EMIs.

Talk to your lender and negotiate to close your loan account by paying off any unpaid dues.

Such unpaid dues or balances on credit cards pull your score down. Paying off this amount will positively reflect on your CIBIL or credit score.

Also, it is better to have just one or two credit cards so that it becomes easier for you to keep track of repayments.

3.Dispute Inaccuracies


Make sure you dispute errors immediately on after reviewing your CIBIL report or if you disagree with a particular transaction made through the vendor.

As mistakes can happen from any side. Even lenders can also make errors at the time of data entry.

It is compulsory for any financial institution to act on those disputes within 30 days.

Once the error is resolved, it will show improvement in your CIBIL or credit score. Do not apply for new credit without resolving old issues, it will affect your score.

4. Keep Old Debt on Your Report

Many of us believe that old debt accounts that we are not using any more should be closed. Because, obviously, we do not know the impact it has on our CIBIL or credit report and score.

For most of us, the minute we get your home or car EMIs paid off, we’re on the phone trying to get it removed from their credit report.

However, arguing to get old accounts off your credit report just because they’re paid is a very bad idea.

Good debts are the debt that you’ve handled well and paid in accordance to agreed terms. Good debt is good for your credit rating. The longer your history of good debt is, the better it is for your credit or CIBIL score.

One of the ways to improve your credit score is to leave old debt and good accounts on as long as possible. This is also a good reason not to close old accounts where you’ve had a solid repayment record.

5. Pay EMI on Time


If you are intending to make a big purchase like a car, home appliances or a  home, ensure that you are not behind in repaying your credit card EMIs and bills on time.

Paying EMIs on time is very important. This is one of the important things that CIBIL or other credit scorer looks into while gauging your credit ratings.

Even if you have huge savings, a drop in CIBIL score can shatter your dream of owning a home or a car in the future.

Timely payment of EMIs and bills can keep your creditworthiness intact.

6. Don’t Hint at Risk

Sometimes, one of the best ways to improve your credit score is to not do something that could risk it.

Two of the biggest risk that you can take is on missing payments and suddenly paying less than you normally do.

Other changes that could scare your card issuer is taking cash advances or even using your cards at businesses that could indicate current or future money stress, such as a pawn shop or a divorce attorney.

You just don’t want to do anything that would indicate risk for your creditworthiness.

7. Demonstrate the Reliability of Bill Payment


Although your credit report does not include information about your payment of utility bills (electricity, water or gas) or phone bills (home, mobile, and internet) in general, it is important to pay these bills when they’re due.

If you don’t make a payment on these services in due time, your credit provider may refer your debt to a debt collector or report your debt to a credit reporting agency, asking them to record the default on your credit report.

8. Keep an Eye on Your Credit Utilization Ratio

Try not to use your credit card for everything. It is better to keep the credit utilization ratio of a credit card up to 30% or lesser.

By doing this, there will be a positive impact on your CIBIL or credit score. Keeping your monthly due balances low will reflect a healthy CIBIL or credit score.

9. Increase your Credit Limit


When you ask your bank to raise your credit limit, particular for credit cards, it does not necessarily mean that you get a chance to spend beyond your means. This increase in credit limit can have a number of plus points if you manage your credit wisely.

Simply it means that you have a lot more credit available at your disposal, and if you keep your credit utilization low, it will have a positive impact on your CIBIL or credit score.

Having said that, please ensure you don’t spend beyond your repayment capacity.

10. Watch out for Joint Applicants


This is actually a situation where you could suffer even if you are not at fault end.

In such scenario, if you are the joint application for a loan someone else has taken, and they have defaulted on payments then you too will lose out in your CIBIL or credit score as it will reflect in your report too.

The best way to avoid this is to ensure that the loans and cards are being paid for on time and limit yourself to apply for joint credit terms.

Why Your CIBIL or Credit Score is Important?

We are living in times where we need money to make money, and we often spend precious moments of our lives thinking about how to make this money.

With banks and other lending agencies opening up in every town and cities of India, one might think that getting money will become easier, but this might not always be the case.

Given the kind of risk involved in lending, almost all financial organizations rely on certain criteria to gauge the repayment capacity of an individual or a business entity.

A CIBIL or credit score is perhaps the single biggest determinant when it comes to you availing a loan, which makes it critical for us to maintain our credit scores.

CIBIL is the first and the most trusted credit rating bureaus in India.

Its scoring technique is trusted by most banks and NBFCs as the accuracy level of CIBIL ratings are far better than other credit bureaus operating in India.

CIBIL score act as the first impression of the applicant in front of the credit lenders. A person who manages his finances well will always have a higher CIBIL or credit score. Lower CIBIL score signifies that the applicant has low creditworthiness and banks refrain from giving loans to such applicants.

Not only does a good score improve our chances of getting a loan/credit, but also helps us get a better interest rate from lenders.

While we give ourselves a makeover before approaching a lending organization, paying attention to our score and giving it a makeover is just as important.


By following above mention 10 smart tips, you can improve your CIBIL or credit score to a great extent.

A high CIBIL or credit score indicates that one has disciplined spending and regular repayment habits.

Thus, the banks, the other financial institutions, and the credit card companies will offer you a higher credit limit with better terms and conditions.

While it is true that a bad credit score can be damaging towards your future credit requirements, the situation is not completely beyond for you to repair.

The only thing you need to keep in mind is that it takes at least a few months for the scores to improve so you need to strap in for a bit of a wait before your scores start showing any improvement.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww.

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