10 Tips To Give Your Credit Score A Shot In The Arm

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Your Credit Information Bureau Limited (CIBIL) TransUnion score is a crucial factor in determining your creditworthiness for any credit instruments like loans or credit cards you may apply for. Your CIBIL score is affected by how you handle your debts and your credit history as shown in your credit report. Your credit report contains details such as past credit availed, payment regularities, etc. A high score, usually 800 and above, means high creditworthiness, whereas a score  that is closer to 300 is considered low and labels you as a risky borrower.

A good CIBIL score is your ticket to quick and hassle-free loan and credit card applications and is used as a yardstick by financial institutions to decide whether to extend a new loan or credit card to you and what interest rate to charge on your loan.


The following tips can help you get your credit score under control:

1) Check your credit report periodically

A healthy CIBIL score is rooted in a clean credit report. Request a copy of your credit report and check all entries thoroughly. If you spot any mistakes and/or erroneous entries, have them resolved with the reporting agency/credit bureau at the earliest.

Sometimes, financial institutions/banks might not update credit bureaus regarding repayments in a regular manner.  In such cases, your credit report may reflect even settled dues and closed loans as unpaid. Such out of date information could also be the outcome of clerical errors or fraudulent transactions (resulting from identity theft) in your name.

2) Pay your credit card bills and loan EMIs on time

Regularly paying off your outstanding credit card bills within the stipulated time frame has a positive impact on your credit score. Payment regularity contributes 30%–35% to your total credit score. Having no late on your credit card outstanding balances and not missing loan EMI payments contribute significantly to a healthy credit score.

3) Outstanding debts be gone

To improve your credit score, pay off old debts and outstanding loans. Begin with paying off unsecured loans that carry higher interest rates such as personal loans, credit card outstanding balances, etc. Then focus on other debts. Making timely payments to get rid of your outstanding dues helps boost your credit score.

On the contrary, if you square off all your credit card dues suddenly at one go, it could indicate instability of your financial standing, thus negatively impacting your credit score. While regular repayments boost your credit health, sudden one-time squaring of debts has the exact opposite effect.

4) Spend small, pay in full

Avoid making purchases on your credit card that you doubt you can repay by the end of your billing cycle. Keep a strict control on your credit card spends and always try to pay off the entire outstanding in full each month. Try bringing down the balance of each credit card to 30% or less below your sanctioned credit limit. Settle dues for the card with outstanding balance closest to the maximum credit limit first. This will protect you from falling prey to the “minimum amount” debt trap that entails high interest charges and make the repayment drag on for months or years.

5) Limit your credit utilisation

Your credit utilisation is the amount of credit you use  vs. the total credit sanctioned to you. At any point in time, your credit utilisation should ideally remain within the 30-40% range, never exceeding 40%. This will help you maintain a good CIBIL TransUnion credit score.

6) Ensure a healthy credit mix

Business and home loans are secured loans, good for asset creation. Repaying these loans on time improves your credit score. Credit card and personal loans fall in the unsecured category and too many of these will be a reflection of poor credit behaviour and adversely affect your credit history. You must therefore act accordingly to find the correct mix of credit instruments.

7) Put a cap on the number of credit cards you own

Owning a credit card may help you qualify for loans, however, having too many credit cards and making major spends increases the credit utilisation ratio and has an adverse effect on your credit score. Applying for a new credit card when your credit score is already on the lower side is not a good idea.

A low credit score can be prevented by avoiding excessive usage of credit cards and by not keeping more cards than you need. Limiting expenses between 30-40% of your total credit limit prevents your debts from spiraling out of control.

8) Consider a secured credit card

If you have an unsatisfactory CIBIL score but want a credit card nevertheless, consider a secured credit card. Several banks like Citibank, ICICI, SBI, RBL Bank etc. offer secured credit cards that are backed by fixed deposits made with the bank.  Secured credit cards help you establish good credit history.

9) Keep a track of your joint, co-signed, and guaranteed accounts

Regularly monitor the statements of your co-signed loans because any negligence on the part of the primary applicant makes you equally liable and can adversely affect your credit score.

10) Limit loan inquiries

Each time you enquire for a loan, your lender makes a credit enquiry and these enquiries are recorded in your credit report. Multiple inquiries in a short span puts a red flag against your name and negatively impacts your credit score, making it tough for banks to decide whether to extend the loan to you or not. If you already have a low credit score, avoid making too many new loan enquiries.


Once you successfully restore your score, make sure not to stack up excess credit nor fall back on timely payments. To build a strong CIBIL score, excellent financial discipline is essential, which in turn is the key to sound and long term financial health.


One thought on “10 Tips To Give Your Credit Score A Shot In The Arm

    […] it comes to personal loans, the sooner you pay, the better will be your financial health and the credit score. If you are one looking to pay off your debts in the shortest possible time period, in the […]


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