5 Simple Ways to Improve Your Credit Score

Credit score is one of the key factors that determine your eligibility for credit. The lower your credit score, the harder it will be for you to avail a loan or credit card. On the other hand, a high credit score could not only help you avail credit, but will also open the door to attractive terms and conditions such as lower interest rates, higher credit limit, etc.

Credit scores range from 300 to 900. Banks and financial institutions prefer offering credit to individuals whose credit score is above 750 as it means that they can manage their finances well. If your credit score is less than 750, there are number of steps you can take to improve it and enhance your creditworthiness. Once you take these measures, it takes three to six months for the changes to reflect in your credit score.

Here are some simple ways through which you can improve your credit score:


Paying your bills on time is one of the easiest ways through which you can improve your credit score. Setting the auto-debit facility for the payment of all your bills can go a long way towards ensuring that all the payments are made on time, thus reflecting positively on your responsibility towards the repayment of debt. In case the account linked to your debt does not have sufficient funds and you would like to make the payment through another account, you can simply set a reminder on your phone for 3-4 days prior to the due date. Doing so will ensure that you remember the due date for the payment, and thereby make the payment on time, thus contributing towards an increase in your credit score.


It is very convenient to use your credit card to make purchases, be it online or offline. You may also be eligible for cashback or reward points that may urge you to use your credit card even when you don’t necessarily have to. However, make sure that your credit utilization ratio is less than 30% of the limit available to you. For instance, if your credit card has a monthly limit of Rs.2 lakh, make sure that you spend no more than Rs.60,000 per month. Doing so will indicate responsible utilization on your part, which, in turn, will result in a higher credit score.


Excessive spending on your credit card can cause a severe dent on your credit score. In case you consistently cross the monthly limit on your credit card transactions, you can request your bank to raise your credit limit, that is, if you cannot lower your credit card expenses. Raising your credit limit will mean a decline in your credit utilization, which, in turn, will indicate that your spending habits are controlled, thereby reflecting well in your credit history and subsequently increasing your credit score.


A credit line – be it a loan or a credit card – with a long age reflects well upon you. For example, if you have a credit card that you’ve held for five years, it means that you’ve owned a credit line without being in default. This reflects well upon you and boosts your credit score. Therefore, try and maintain your credit lines for as long as you can.


In case you are facing tough times and do not have the money to repay your credit card bills or loans on time, it is important to communicate with your bank. For instance, if you lose your job and have no other source of income to repay the debt, your bank must be intimated about the same. Doing so could enable the bank to analyse your situation so that some leeway can be provided in deferring the payments. You could ask the bank to make some adjustments so that the delay in payments will not affect your credit score.

As a person with debts, you must remain aware of your credit score. Therefore make it a point to check your score at least once a quarter to know of your progress. Frequent checks would also help you spot any, potentially harmful errors in your report.

Your credit score is crucial when it comes to availing loans and credit cards. It is your responsibility to ensure that it does not fall below 750 as it could make it difficult for you to avail credit. A lower credit score could also mean that you may be eligible for credit, but the interest rates and terms and conditions may not be as attractive. Taking these simple measures to correct your credit score will enhance your creditworthiness and make it easy to avail credit whenever necessary.

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