1. Make All Payments On Time, Every Time
This is the most critical habit for a healthy CIBIL score. Your payment history is the single biggest factor that credit bureaus consider, making up about 35% of your score. A consistent record of timely payments on all your obligations—including credit card
bills, loan EMIs, and even utility bills—signals to lenders that you are a reliable borrower. Even one late payment can negatively impact your score and remain on your credit report for years. To ensure you never miss a due date, set up automatic payments or reminders for all your recurring bills. If you've had delinquencies in the past, establishing a recent history of consistent, on-time payments over several months can begin to repair the damage and steadily improve your score.
2. Keep Your Credit Utilisation Ratio Low
Your Credit Utilisation Ratio (CUR) is the percentage of your available credit that you are currently using. It's the second most important factor in your CIBIL score calculation. Lenders see a high CUR as a sign of being over-reliant on credit, which can be a red flag. For a healthy score, financial experts recommend keeping your overall CUR below 30%. For instance, if you have a total credit limit of ₹1,00,000 across all your cards, you should aim to keep your outstanding balance under ₹30,000. To manage this, you can either pay down your balances or request a credit limit increase from your bank, which can also help lower your ratio. Spreading your expenses across multiple cards instead of maxing out one can also be an effective strategy.
3. Regularly Review Your Credit Report for Errors
Inaccuracies on your credit report can unfairly drag down your score. These errors can range from incorrect personal information to accounts you never opened or payments that were not correctly recorded. It is crucial to get a copy of your CIBIL report regularly and review it carefully. You are entitled to a free report annually from each of the credit bureaus. If you spot any discrepancies, you have the right to raise a dispute. The CIBIL dispute resolution process allows you to file a correction request online through their official portal. You will need to provide details of the error and may need supporting documents, like bank statements or payment receipts. CIBIL will then coordinate with the lender to verify and rectify the mistake, a process that is typically resolved within 30 days.
4. Be Strategic About New Credit Applications
While having a mix of different types of credit (like credit cards and loans) can be beneficial, applying for too much new credit in a short period can hurt your score. Each time you apply for a loan or credit card, the lender makes a 'hard inquiry' on your credit report. Multiple hard inquiries can suggest to lenders that you are in financial distress or are credit-hungry, which negatively impacts your score. Therefore, it's wise to apply for new credit only when absolutely necessary. Avoid the temptation of store discount offers that require opening a new credit account. Furthermore, don't close your old credit card accounts. A longer credit history is viewed positively, so keeping older, well-managed accounts open demonstrates a stable and responsible credit track record.
