Your credit or CIBIL score is a measure of your creditworthiness and financial health. This score acts as a key factor in the approval process for loans, particularly personal loans. Therefore, before applying for personal finance or any other type of loan, it’s crucial to check your credit score and, if necessary, improve it. The good news is that you can significantly improve your score in just 30 days. Here’s how you can do that.
Do Not Delay Bill Payments
The first step to improving your credit score quickly is to ensure that you never delay bill payments. Whether it’s a credit card bill, loan EMI, or any other payment, always pay it by the due date. Making payments before the due date can be even more beneficial. According to Tata Capital, timely payments can make you eligible for a higher credit limit, which in turn can improve your credit score.
Get a Credit Card
If you have no credit history, you are considered “new” to credit, which means you don’t have a credit score—high or low. This might seem like an advantage initially, but when you apply for loans, this can cause issues. Having a credit history isn’t bad. In fact, it acts as a report card for your loan eligibility, and lenders will trust you with higher loan amounts at lower interest rates. So, consider getting a credit card, even if you don’t plan on using it regularly. It helps build a credit history and improve your score.
Reduce the Credit Utilization Ratio
A great way to improve your credit score within 30 days is to keep your credit utilization ratio below 30%. For example, if your credit limit is Rs 1 lakh, limit your spending to Rs 30,000 at most. This will help you boost your credit score quickly and establish financial discipline by paying your bills on time.
Request a Credit Card Limit Increase
Once you have kept your credit utilization ratio below 30%, consider requesting a credit card limit increase. According to Tata Capital, being approved for a higher credit limit shows that you are a responsible user, which can boost your credit score. If you are paying bills on time and keeping utilization low, most lenders will gladly approve the increase. Many issuers even offer online requests for limit increases.
Choose a Cash-Backed Credit Card
Opting for a cash-backed credit card can help improve your credit score quickly. By depositing a lump sum amount equal to or slightly less than your credit limit, you provide a repayment guarantee, which is a reliable way to build or improve your credit score. A secured credit card is a good option for first-time users without a credit history, as it can help you get started with building credit (Credit Score Tips).
Avoid Multiple Credit Cards or Loans
To boost your credit score, avoid taking out multiple credit cards or loans simultaneously. Lenders may view borrowers with multiple obligations as less creditworthy, which could hinder your chances of receiving additional credit in the future. Failing to repay multiple loans on time can harm your score, so it’s advisable to maintain a time gap between taking loans or credit cards.
Track Your Credit Report
Your credit score is part of a detailed credit report issued by the authorized bureaus in India—CIBIL, Equifax, Highmark™, and Experian. Regularly tracking your credit report helps you spot any discrepancies or errors. Fixing these issues promptly is another way to improve your credit score in 30 days (Credit Score Tips).