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Your credit score is an important factor in determining your eligibility for a loan, a credit card and other credit products. Credit scores are dependent on your credit history including previously taken credit and repayment patterns.

A high score indicates good creditworthiness and a low score indicates poor creditworthiness. Low scores could indicate that you are a risky borrower and lenders could be hesitant to easily approve your loan applications.

In India, credit scores are assigned by one of the top four credit bureaus: Equifax, Experian, CIBIL™ and CRIF™.  A credit score ranges between 300 and 900. If your score is near 900, you will have better chances of loan applications being approved. A score between 300 and 549 is considered to be poor and a score ranging between 550 to 700 is considered fair. Aim to get your credit score to 750 and above for the best loan and credit card offers.

If you aren’t sure of your credit score, you can check it for free at CreditMantri. Just enter a few key details like your PAN number, email id, pincode and mobile number to get your latest credit score for free.

If you have a poor credit score and are wondering how to improve credit score fast, then we have all the necessary answers for you. Read on to find out how to increase credit score quickly.

Improve My Credit Score

How to improve my credit score?Why is your credit score important?

In today’s era, almost anything can be bought with money. Not everyone has money and hence, there are various avenues to earn or borrow money. While there are many banks and lending institutions today, you may assume that borrowing money is easy. However, considering the risk involved in lending, most financial organisations have a set of criteria to evaluate the repayment capacity of a borrower.

This is when a credit score comes into the picture. A credit score is one of the key determinants used by lenders to evaluate the eligibility of applicants. Thus, it is important for borrowers to have a good credit score.

  • A good credit score improves the chances of easily getting a loan/credit.
  • It also helps you in fetching better interest rates, thereby reducing your overall loan burden and increasing savings.

Therefore, before approaching a lender, always make sure that you have a good credit score.

How to check your credit score and report?

Regularly checking your credit score will give you a good idea about your creditworthiness. Every credit report primarily consists of your credit score and a detailed list of all your credit transactions. It can be availed from a reputed credit agency such as Equifax, CIBIL™, Experian and CRIF™ High Mark.

The credit report will tell you about any loans or credit cards where your payments have been delayed. This will indicate why your credit score may be low. In case there are any errors in the report, you can report the same to the credit agency and your lenders.

How to improve my credit score?How to improve the CIBIL™ score fast?

Apart from regularly checking your credit report, here are some of how you can improve your credit score:

Check for Errors

You should make sure to dispute all errors by visiting the official credit agency website immediately post discover. As soon as you review your credit report, you can check for the transactions that do not look identifiable or are incorrectly mentioned. You must act upon the disputes within 30 days and ensure to get them rectified.

Keep a Watch on Credit Utilization Ratio

Try to restrict your credit card use only for essential transactions. This will help in maintaining a credit utilization ratio below 30%. A low credit utilisation ratio will improve your credit score as it is an indication to the lenders that you use your credit judiciously.

Avoid Fresh Credit Applications Immediately After Rejection

If you have recently applied for a loan or a credit card and it has been rejected, such information gets recorded in your credit report. In case you apply for a fresh loan or other credit immediately then your credit score will be impacted. The ideal step in such cases is to avoid fresh applications and wait for your credit score to get back on track.

Avoid Frequent Applications

Every time you apply for fresh credit, lenders will check your credit report and all such enquiries get recorded in the report. Such enquiries can result in a drop in your score. It will reflect that you are credit hungry and lenders will assume that you will not have the capability to repay debt in time.

Timely Repayments

Prioritise your loan repayment to improve your credit score. In case you are unable to make timely repayments, you should approach your lender for an arrangement regarding the same. Lenders may consider any financial stress that you may be facing. This will help save your credit score as compared to delayed payments.

Don’t Settle - Instead Aim to Close Credit Accounts

Many times, credit card users approach the bank and request to close the debt for a lower amount than the total amount due. Such settlements may reflect on the credit report and hurt the credit score. Lenders will be hesitant to grant credit to such settled accounts in the future.

Borrow Only When Needed

Your credit score is likely to be impacted if you borrow often. Always take a loan only when it is necessary and never exhaust your credit card limit. This will require you to regularly evaluate your expenses and income. Good financial planning will help in curbing expenses and avoid unwanted credit.

Choose a Good Credit Mix

There are generally two types of loans, secured and unsecured. In case you use too many unsecured loans, banks see it as a negative sign and may decline your future loan applications. It is ideal to go for a good mix of secured and unsecured loans. For instance, personal loans combined with home loans.

A bad credit score can hurt your future credit applications. If you are worried about how to increase CIBIL™ score fast, you can work towards improving your credit score. It may take a few months for the credit score to increase. Hence, have patience and constantly work towards ensuring good credit usage by following some of the points mentioned above.

FAQ - Is it possible to improve my Credit Score?

1. How can I raise my credit score in 30 days?

You can work towards improving your credit score and ensure that this happens quickly by following the following points:

  • Close outstanding debt
  • Avoid minimum credit card payments
  • Make full repayments on loans and credit cards
  • Avoid multiple credit applications

2. Can I improve my credit score within 30 days?

It may be difficult to raise your credit score within 30 days. However, if you have had a reasonable credit score all along, this can be possible by putting in the right efforts. As an immediate step, make sure to check for any flaws in your credit report.

3. How many months will it take to improve my credit score?

It may take approximately 4-12 months to improve a credit score. This is if you have had a poor credit history. You can work towards fast-tracking this process by ensuring good credit behaviour and avoiding multiple credit applications.

4. How can I increase my credit score in 24 hours?

It is not possible to improve your credit score within 24 hours. However, in some cases where the credit report is flawed, the credit agency may consider making immediate changes and this can improve the credit score.

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