Your credit score is an important part of your financial life. Also known as personal loan, home loan, business loan or credit card lenders who do a thorough check on your credit score before applying for a same.
A poor score could mean rejection when you want a loan or paying things off with a sky-high interest rate.
The good news? It’s faster and easier than you think to raise your credit score. Here in this guide, we discuss practical and tested ways to boost your credit score quickly in India.
What a Credit Score Is — and Why It Matters
In India, your credit score (often popularly called CIBIL score) falls between 300 to 900.
- 750+ → Good (Easy to get loan)
- 700–749 → Good
- 650–699 → Average
- Below 650 → Risky for lenders
Your credit score is used by Banks and NBFCs to analyse:
- Your repayment behaviour
- Credit risk
- Loan eligibility
- Interest rate offer
Similarly, a high score indicates good financial credibility and quick loan sanction.
Check Your Credit Report Immediately
Before you can improve your score, you need to know what is impacting it.
Get your credit report from legitimate bureaus:
- CIBIL
- Experian
- Equifax
- CRIF High Mark
Look for:
- Missed payments
- Incorrect loan entries
- Closed loans marked as active
- High credit card usage
If you do, dispute it pronto. Just cleaning errors can make your scores better in 30-45 days.
Pay All EMI and Credit Card Bills on Time
Your payment history makes up nearly 35% of your credit score.
Just one default EMI payment can drastically lower your score.
What You Should Do:
- Set auto-debit for EMIs
- Enable payment reminders
- Clear overdue amounts immediately
If you have been inconsistent in paying in the past, begin making consistent payments now. Consistent, timely payments result in a slow rebuild of your score.
Reduce Your Credit Utilisation Ratio
Credit utilisation is the amount of credit you use relative to your available limit.
Example:
If you have ₹1,00,000 limit on your credit cards and you spend ₹80,000 → 80% utilisation (Extremely High)
Up to 30% is the benchmark for experts.
How to Fix This Fast:
- Pay down outstanding balances
- Request a credit limit increase (if you are eligible)
- Avoid maxing out credit cards
Lower usage can boost your score within 1–2 billing cycles.
Avoid Multiple Loan Applications
Whenever you apply for a loan or credit card, lenders do a “hard inquiry”.
If there are too many inquiries over a short period, it implies credit hunger and lowers your score.
If your loan was rejected:
- Don’t apply again immediately
- Improve your score first
- Wait at least 3–6 months
Submit with wary feeling for eligibility.
Clear Outstanding Dues Strategically
If you have defaulted loans or dues on your credit card:
- Contact the lender
- Negotiate settlement or structured repayment
- Clear outstanding amounts
But if possible, don’t settlement, since it can impact your credit report negatively. Full repayment is ideal for your long-term credit health.
Maintain a Healthy Credit Mix
Credit credibility is boosted by a balanced credit profile.
Good mix includes:
- Loans that have collateral (mortgage, car)
- Unsecured loans (personal loan)
- Credit card usage
If you have no credit history, you might consider:
- Secured credit card
- Small consumer durable loan
Use responsibly and it will gradually build your credit score.
Don’t Close Old Credit Cards
Length of credit history matters.
Shutting down old credit cards makes your oldest account and your total available credit more recent, and therefore might lower your score.
Instead:
- Keep old cards active
- Use them occasionally
- Pay full balance monthly
More years of credit history = better your profile.
Avoid Becoming a Loan Guarantor
If the main borrower does not pay, your credit also takes a hit.
Before signing as guarantor:
- Evaluate the borrower’s repayment ability
- Understand your risk exposure
This is how a lot of folks unwittingly destroy their credit score.
Rebuild Score with Secured Credit Products
If your score is 650 or lower, try:
- Secured credit card against FD
- Small secured loan
6 –12 Months paid on time.
This is an indicator of positive repayment habits, and gradually your score improves.
Have Patience – Building Credit Takes Time
Some changes appear on it within 30–60 days but complete credit repair may take 6–12 months.
Consistency is key.
There are no “quick fixes,” but action with discipline will produce results.
How Quickly Can You Raise Your Credit Score?
Here’s a realistic timeline:
- Fixing report errors → 30–45 days
- Reducing credit utilisation → 30–60 days
- Clearing overdue payments → 2–3 month
- Rebuilding from defaults → 6–12 months
Better is a function of past badness.
What’s the Ideal Credit Score to Avail a Loan in India?
For most banks and NBFCs:
- Personal Loan → 700+ recommended
- Home Loan → 750+ preferred
- Business Loan → 700+ ideal
The lower the scores, meanwhile, dear reader, means higher interest rate and longer approval.
Conclusion
It’s not rocket science to increase your credit score in India, but it does call for discipline.
Focus on:
- Paying EMIs on time
- Reducing credit card usage
- Avoiding unnecessary loan applications
- Monitoring your credit report regularly
If you’re planning to apply for a loan in the near future, begin working on your score at least 3–6 months before.
Not only does a solid credit score increase your likelihood of approval, but it also increases your chances of being approved on more favorable terms.
Get Your Questions Answered
For most banks and NBFCs, a CIBIL score of 750 or above is considered excellent for personal loan approval. A score between 700–749 is still acceptable, but interest rates may vary. Higher credit score means better approval chances and lower interest rates.
Honestly? It’s tough. Some lenders might approve you, but you’ll pay through the nose in interest. Better to spend 3-6 months improving your score first. The money you save on interest will be worth the wait.
Yes, it is possible to get a personal loan with a low credit score, but approval may depend on income, repayment capacity, and lender policies. You may also receive a higher interest rate. Improving your credit score before applying can increase approval chances.
Start with a secured credit card or become an authorized user on someone else’s card. Use it for small purchases, pay it off completely every month. Give it 6-12 months and you’ll have enough history to start getting real credit offers.
If you do everything right—pay on time, keep utilization low, fix errors—you’re looking at about 6-8 months. Maybe faster if you were held back by errors on your report. Maybe longer if you’ve got defaults or settlements.
