Credit cards have become the norm for people making their purchases on credit whether for personal or business reasons. There are now a number of credit card service providers who offer credit cards at attractive rates in India. If the credit card holder ensures timely repayment of credit card dues, it helps in building a good credit score. Having a good credit score assures lenders of the financial soundness of the borrower making their potential credit card or loan application easily approved. Lenders place a high reliance on credit score for judging the creditworthiness of the borrower.

So, how can a credit card holder improve their credit score or CIBIL ™ Score? Let us first understand what is a good CIBIL™ Score and its relevance. 

Why is a good CIBIL™ Score important?

CIBIL™ score helps lenders evaluate your creditworthiness based on your past credit history.  CIBIL™ score is therefore one of the main criteria considered for approving a potential loan or credit card by lenders in India.  

If your credit score is low, then lenders consider you a high-risk category implying you do not maintain financial discipline, especially with regard to timely repayment of loans or credit card dues. This could lead to your loan or credit card application getting rejected. So, having a high credit score ensures lenders about your creditworthiness and future financial capability towards timely repayment of debt.

What is meant by a good CIBIL ™ Score?

CIBIL ™ score is normally in the range between 300 to 900. A score of 750 and above is considered as an excellent score providing greater benefits to the holder of a  credit card - like faster credit card approval, lower rate of interest on the credit card, higher amount of credit sanctioned etc.

A CIBIL™ score ranging between 550 – 749 is considered as a medium score while a score between 300 - 549 is considered as a poor score.

Additional Reading: How can I Improve my Credit Score

How can a credit card help improve your CIBIL ™ score?

A credit card holder can improve their CIBIL ™ Score by following the tips given below:

  • Pay outstanding credit card dues

A credit cardholder should always ensure prompt payment of their credit card dues. This helps in avoiding late payment charges and also in improving the credit score. Many people pay only the minimum amount due on their credit card. This is not a good practice as it leads to the credit card holder paying interest, to which penalty charges and late fees also get added in the next billing cycle, leading to huge revolving debt. Paying the credit card dues on time saves a credit card holder from this undue charge and also improves their credit score.

  • Limit credit utilization

One should always strive for using less than 30% of their credit card sanctioned limit. As utilising more than 30% of the limit is considered as a high utilization factor which can lead to a negative impact on the credit score. If one wants to utilise more than the sanctioned credit limit, then they should ask their lender for increasing their existing credit limit, so that the credit score does not get affected.

It should be noted that not using your credit card could also lead to a low credit score. Therefore, one should regularly use their credit cards while limiting their credit utilization to less than 30% of their credit card limit. 

  • Limit multiple credit cards

Having multiple credit cards may help a credit card holder to make more credit purchases or get loans. But this is not considered a wise practice as lenders consider people who own multiple credit cards a high-risk category, as they feel that you are always short on credit. So, one should always first get their credit eligibility verified before applying for multiple credit cards. Therefore, one should avoid going in for multiple credit cards at one time and also ensure that there is a time gap between credit card applications to increase your credit score.

  • Track Credit Report

A credit card holder should keep regular track of their credit report. Ensures that all personal particulars are correct. Any error in the report should be immediately reported to the concerned lender or credit bureau and the same should be rectified at the earliest. Otherwise, this could lower your credit score.

  • Make purchases using cash instead of credit

Most people make large purchases using credit cards so as to defer paying for such purchases. This option may help someone who is very prompt in paying off their credit card dues on a monthly basis. For a person who is not regular in paying dues, such huge purchases would result in interest charges and be detrimental to their credit score. 

Additional Reading: Finding Credit Cards Based on Your Credit Score


It takes time to improve your CIBIL™ score, but with prudent planning and financial management, a credit card holder can improve their CIBIL™ score.


1. Should a credit card holder maintain old credit cards?

Yes, it is considered prudent to maintain all your old credit cards if you have been regular in paying your credit card dues, as this will help build a strong and lengthy credit history, improving your credit score.

2. Can I customise my credit card?

Yes, you can customise the credit card limit on your credit card by working out a suitable arrangement with the lender.

3. Should I opt for a longer tenure on a loan to improve my credit score?

Yes, going in for a longer tenure for a loan would ensure that you have low EMIs on a monthly basis reducing your financial burden and maintaining your credit score.

4. Would multiple debts reduce my credit score?

It is always better to avoid having multiple debts as lenders consider such holders a high-risk category which could adversely impact their credit score.

5. Is it important to have a good credit score?

Having a good credit score gives various benefits to the credit card holder- like faster credit card approval, lower rate of interest on a credit card, higher amount of credit sanctioned etc.