Credit Score

How to Maintain a Good Credit Score?


There are thousands of people in India with low credit scores who don’t know what their options are and can’t raise their scores because of it. First-time credit users must realise that their credit score is the bedrock of their financial well-being. The average person has likely heard much about the CIBIL score but may not fully understand it or why it matters. 

Negative credit history can hurt a person’s finances. People with good credit should be careful and check their credit reports often because even a good credit score can go down if the credit bureaus get the wrong information. So, let’s start by learning about CIBIL, then about CIBIL score and how to improve it so that it’s easy for everyone to get credit.

Why Is a High Credit Score Important?

By keeping a good or great credit score, you can save tens of thousands of dollars throughout your life. If you have good credit, you can get lower interest rates on mortgages, cars, and other loans. 

Banks are more likely to compete for the business of consumers with higher credit scores because they represent a lower risk to the institution. In contrast, businesses can get away with charging higher annual percentage rates (APRs) to consumers with poor credit ratings since fewer lenders are willing to work with them. And because your credit score affects your insurance score, it can also make it hard for you to rent an apartment, rent a car, or even get life insurance.

What exactly is a CIBIL score?

A person’s credit score is showcased by a CIBIL score. Simply put, this is a three-digit number that will show their credit profile and loan history.

This is based on prior loan behaviour, such as how often they take loans and how timely they repay their loans. CIBIL score is derived from the reports issued by the banks regularly.

Methods to Improve CIBIL Rating

  1. Never Delay Payments

Your CIBIL score will go down if you don’t repay loans or credit card EMIs on time, so you should avoid this at all costs. Auto-pay, reminders, and a monthly to-do list can all help you make your payments on time.

  1. Check Your CIBIL Score

This is by far the most crucial component in determining a credit score. If a person suspects that there may be errors or misleading data on their credit report, they can check so by requesting a copy of their credit report. Individuals may file a dispute if they discover an error in their name or address or if their new address has not been updated.

  1. Keep Your Credit Utilisation Ratio Consistent

A borrower should never use more than 30% of his or her available credit at any given time. To hit this target, you should spread your spending over various credit products. Reducing your credit usage ratio is one of the best ways to build and keep a high credit score, which can lead to better financial opportunities down the road.

  1. Manage the Proportions of Various Types of Credit

Personal loans, business loans, and student loans fall under the category of unsecured borrowing and are often cited as the primary cause of a low credit score. As opposed to secured loans like a mortgage or car loan, the risk associated with unsecured loans is substantially higher because of the lack of collateral. It is recommended that a person always choose a mix of credit cards as the risk component is balanced, offering a better credit score.

  1. Avoid Asking Repeatedly

You should avoid applying for many loans at once, making you look desperate. When applying for a loan, a credit check will be run. Repeatedly asking for loans sends a bad message to financial institutions, which makes it more likely that the applicant will be turned down for a loan.

  1. Don’t Max Out Your Credit Card

Don’t go as far as using up your available credit as doing so can hurt your CIBIL score. But, if the monthly payments are too high for the amount of credit available, one could talk to the bank about raising the credit line.

  1. Keep Your Existing Accounts Open

It’s never a good idea to sever ties with a financial organization that you’ve been doing business with for a while, such as a bank or credit union. When you cancel an old credit card or bank account, the information is removed from the bank’s files and can negatively affect your credit score.

  1. Keep An Eye On Loans You’ve Cosigned

It’s your responsibility to monitor any loans you’ve co-signed for. Sometimes the borrower cannot repay the loan due to unforeseen financial circumstances. The only thing that suffers when payments are skipped or delayed is your credit score.

  1. Make Use of Some Form of Credit

Without a credit history, borrowing in one’s name can be difficult. They may be able to get a loan, but the interest rates will be hefty. Keeping a credit history and working toward a 750-credit score may necessitate using a credit card. Most lenders approve borrowers with 750+ credit scores. Before applying for a loan or credit card, consider these methods to get lower interest rates. These steps may slowly raise a person’s credit score.


Raising your credit card CIBIL score requires a shift in your financial mindset. Don’t let your credit card bills go unpaid by checking in on them regularly. One sure-fire method of enhancing one’s credit rating is to make timely bill payments. Consult a professional organisation, such as Piramal Finance, if you have any doubts. See if you qualify for their free credit report service. The EMIs and monthly loan payments can be figured out with the help of their specialists. It also provides various financial services to its clientele, including business loans; micro, small, and medium business loans; collateral-free business loans; personal loans; term loans; online business loans, etc.