How to improve your low credit score?

Credit Score is a buzz word these days. For potential credit that you seek from bank or any institute, it comes into play. A credit score is a numerical representation of your creditworthiness. In India, credit scores are usually measured on a scale ranging from 300 to 900. The higher your credit score is, the better your creditworthiness.  You can check your credit score for free through various credit bureaus in India such as CIBIL, Experian, Equifax, and CRIF High Mark. It’s a good practice to review your score regularly. Checking your credit score might cost you a heck of a lot. However, at, they are giving you a chance to check your credit score free. You can periodically check your credit score to keep yourself updated about the latest offers that you may be eligible

A good credit score opens doors to better financial opportunities. Similarly, a bad credit score shuts down all good chances for a loan. However, bad credit score is not the end of the road. You can always improve your credit score. Here are proven methods to increase your credit score

Generally, a credit score of 750 and above is preferred by the lenders. Here are the various ranges of credit scores for your better understanding

Credit score Analysis
300-550  Poor
550-650 Fair
650-750 Good
750 and above Excellent


Measures to improve your credit score

  1. Credit Utilization Ratio

The credit utilization ratio indicates how much percentage of credit available is being used by the borrower. It is calculated as credit used divided by credit available multiplied by 100. Usually, it is advised to keep the credit ratio well within 30%. If you have so, banks might view you as financially disciplined

  1. Avoid Multiple Loans

If you are applying for personal loans with multiple lenders, it would mean you have too many financial obligations. It means lower capacity to pay for future loans. Do not apply for personal loan at multiple sites at the same time

  1. Pay your dues 

Half the reason why people end up with bad credit score is that they do not pay their dues on time. Settle your existing dues immediately and pay your dues on time. Try paying the total amount due as much as possible as only paying the minimum amount due would attract interest and wouldn’t improve your credit score much

  1. Review your credit report

Review your credit report periodically. Credit reports are generated based on the data received from banks and financial institutions. The credit reports can indicate the factors that are bringing your score down. At times, even the credit report can have an erroneous entity which might affect your credit score. You must contact the concerned credit bureau and get your credit scores corrected immediately once you notice 

  1. Reduce loan rejections 

The main reason why loans are rejected is due to income mismatch. Every loan will have a different eligibility criteria, the applicant must check the eligibility criteria properly to avoid rejections 

  1. Check repayment of joint loans

If chances are such that you have a taken a joint loan, keep an eye on repayment of such loans. You might settle the dues properly, but ensure that co-owner is regularly repaying the EMI on time. 

  1. Keep a Good Credit mix

Keep a proper mix of secured and unsecured loans. It demonstrates your ability to manage credits well and hence improves your creditworthiness in


Having a low credit score is a setback, but however, there is always chance to improve the same. By understanding and managing the factors that influence your score, you can build a strong financial foundation.