Ways to Improve Your Credit Score

A credit score is a 3-digit numeric expression that helps the lenders assess your creditworthiness. It is one of the important aspects of your financial well-being and starts from 300 to 900. If you are not happy with your credit profile, you’re not alone. However, the happy news is that you can improve your credit score in simple and easy steps.

Credit Score Range

A credit score ranges from 300 to 900 where 300 is the lowest and 900 is considered the perfect score. Here is the cibil score range:

Range Type

Score Range

The probability of loan approval

The probability of low-interest rates


750 & Above




700 – 749




650 – 699




550 – 649




Below 550



How to Improve Credit Score

Here are a few steps that can give you the answer to the question “How to improve credit score”:

Pay your bills on-time

Your payment history is the most important part in the calculation of your credit score. Which is why you must pay your bills on time. When a lender checks your credit report, they would want to know how credible you are. On the basis of the past financial performance, your future performance is assessed.

Therefore, stay ahead of the curve by paying your bills - credit card, loans and any other form of credit. You can also use a tool such as EMI alerts that can remind you about the payments before the due date.

Pay off debt and keep in mind of the credit utilization ratio

The credit utilization ratio is another important factor in your credit score calculation. It comprises 30% of your credit score. The credit utilization ratio is calculated by adding your outstanding balances by your credit limit. For instance, if you have an outstanding balance of ₹50,000 and your credit limit is ₹100000, then your credit utilization ratio is 50%.

Generally, lenders would prefer a ratio below 30% which is what people with good credit score practice. A low credit utilization ratio means you have not maxed out your credit cards and are good in managing your finances well.

Apply for new credit only when necessary

This is one of the easy answers to the question “How to improve credit score”. Do not apply for new credit to just improve your credit mix. This will only hamper your credit score and not help you. Unnecessary credit can harm you by creating too many hard inquiries and tempt you to spend more and accumulate debt.

Do not apply at too many institutions simultaneously

Although a new credit can increase your credit limit, when applying, an application generates a hard inquiry which can affect your credit score by a few points. However, when you apply at too many institutions simultaneously, the effect is adverse and therefore should be avoided. Moreover, this also gives an impression to the lender of you being a risky customer as this shows your loan hunger behavior.

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Dispute any errors on your credit reports

Any incorrect information on your credit report can drop your credit score. This is why you should check your free credit report on a regular basis. If you see any form of discrepancy, you must pull your credit report from all the credit bureaus and see if the error is from the bureau or by the lender.

Don’t close unused credit accounts

If an old credit card account is not costing you money in the form of annual fees, then it is recommended to not close the unused credit accounts. This is because closing an account can affect your credit utilization ratio. Therefore, it is best to maintain a balance in your credit mix.

How long does it take to improve your credit score?

Time is your friend when it comes to improving your credit score. Any negative information such as credit defaults, bankruptcies, etc. stays on your credit report for a specific period. Therefore, if you are planning to improve your credit score, the best thing you can do is pay your bills on time and wait.

Improving your credit score is a patient and diligent process. The length of the time taken to improve your score depends on the change(why it happened). The negative changes that happen in your credit report are due to some negative credit activities that have happened. This could be credit defaults, bankruptcies, etc. and will affect your credit score till they reach a specific age.

  • Credit defaults remain in your credit report for a period of two years.
  • Hard inquiries stay and effect for two years
  • Bankruptcies stay on the report for a period of 7-10 years.