Tips & Guides
How to Improve Your CIBIL Score for Better Loan Approval
R
Rajesh Kumar
Credit Expert
Dec 28, 2026
6 min read
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Your CIBIL score is one of the most important factors that lenders consider when evaluating your loan application. A good credit score not only increases your chances of approval but also helps you secure lower interest rates. Here's everything you need to know about improving your CIBIL score.
Understanding CIBIL Score
CIBIL score is a 3-digit number ranging from 300 to 900 that represents your creditworthiness. It's calculated based on your credit history, payment behavior, and credit utilization.
750-900
Excellent - Best loan terms and lowest interest rates
700-749
Good - Favorable loan terms
650-699
Fair - May face higher interest rates
Below 650
Poor - Difficult to get loan approval
Factors Affecting Your CIBIL Score
Payment History (35%)
Timely payment of EMIs and credit card bills
Credit Utilization (30%)
How much of your available credit you're using
Credit History Length (15%)
How long you've been using credit
Credit Mix (10%)
Variety of credit types (secured and unsecured)
Recent Credit (10%)
Number of recent credit inquiries
10 Proven Ways to Improve Your CIBIL Score
1. Pay All Bills on Time
Set up auto-pay or reminders to never miss a payment. Even one missed payment can significantly impact your score.
2. Keep Credit Utilization Below 30%
If your credit card limit is ₹1 lakh, try to keep your usage below ₹30,000.
3. Don't Close Old Credit Cards
Length of credit history matters. Keep your oldest cards active even if you don't use them much.
4. Maintain a Healthy Credit Mix
Have a balance of secured (home, car loans) and unsecured (credit cards, personal loans) credit.
5. Limit Hard Inquiries
Each loan application creates a hard inquiry. Too many in a short time can hurt your score.
6. Check Your Credit Report Regularly
Look for errors and dispute any inaccuracies immediately. You're entitled to one free report per year.
7. Pay More Than the Minimum
On credit cards, always pay more than the minimum due to reduce your outstanding balance faster.
8. Avoid Settling Debts
Settled accounts are marked negatively. Try to pay in full instead of settling for less.
9. Become an Authorized User
If someone with good credit adds you as an authorized user, it can help your score.
10. Be Patient
Building a good credit score takes time. Consistent good behavior over 6-12 months shows results.
Common Mistakes to Avoid
Applying for multiple loans simultaneously
Maxing out credit cards regularly
Ignoring small debts or utility bills
Co-signing loans without understanding the risk
Not reviewing your credit report for errors
How Long Does It Take to Improve?
The time required to improve your CIBIL score depends on your starting point and the actions you take:
Minor improvements
3-6 months of consistent good behavior
Significant improvements
6-12 months
Recovery from defaults
12-24 months or more
Conclusion
Improving your CIBIL score is a marathon, not a sprint. By following these strategies consistently and maintaining financial discipline, you can significantly improve your creditworthiness. Remember, a good credit score is not just about getting loans - it's a reflection of your financial health and responsibility.