- By Shreyansh Mangla
- Fri, 27 Jun 2025 08:10 PM (IST)
- Source:JND
How To Improve CIBIL Score: Your CIBIL score is crucial when applying for loans and credit cards. A good score significantly increases your chances of approval, while a poor one can lead to rejections and difficulties in securing credit. A low CIBIL score can present several challenges, primarily making it difficult to obtain financial products like loans and credit cards. If your CIBIL score needs improvement, here are some effective strategies.
Key ways to improve your CIBIL score
- Maintain EMI payments on time
Timely repayment of EMIs is paramount. Whether you have an existing loan or are considering one, consistent on-time payments are the most significant factor in building and improving your CIBIL score. Delays in EMI payments not only result in penalties from your lender but also severely negatively impact your credit score.
- Pay your bills on time
Credit card payment history has a substantial impact on your CIBIL score. Ensure you pay your credit card bills in full and on or before the due date. Missing payments will lead to late fees and a significant drop in your CIBIL score.
- Stay within your credit limit
Avoid maxing out your credit cards. High credit utilisation (using a large percentage of your available credit) can negatively affect your CIBIL score, even if you pay your bills on time. Aim to keep your credit utilisation below 30% of your total credit limit.
- Be mindful of loan tenure (short-term vs. long-term)
While not directly about repayment discipline, the tenure of your loan can indirectly impact your CIBIL score by affecting your repayment capacity. Avoid excessive short-term loans: Taking too many short-term loans can lead to higher individual EMI amounts, potentially straining your finances and making it difficult to manage payments on time.
This can, in turn, affect your CIBIL score. Consider longer tenures for comfort: Opting for a longer loan tenure can reduce your monthly EMI burden, making it more manageable to pay installments comfortably and consistently. This helps in maintaining a good repayment history and thus, a healthy CIBIL score.