Start with a Secured Credit Card
For anyone with no credit history, a secured credit card is the most effective starting point. Unlike regular credit cards, approval for a secured card isn't based on your past score but on a fixed deposit (FD) you place with the bank. This FD acts as collateral.
The bank then issues you a card with a credit limit typically linked to your FD amount. When you use this card for small purchases and, crucially, pay the bill in full and on time each month, the bank reports this positive activity to credit bureaus like CIBIL. This process demonstrates financial discipline without the risk of rejection and serves as a gateway to obtaining unsecured credit cards later.
Use 'Buy Now, Pay Later' Wisely
The “Buy Now, Pay Later” (BNPL) options available on nearly every e-commerce app are a double-edged sword. Used responsibly, they can be a powerful tool for credit building. BNPL services are essentially short-term micro-credit facilities. When you make a purchase and opt to pay in instalments, these providers often report your payment behaviour to credit bureaus. Making timely BNPL payments can help strengthen your credit profile, especially if you have a limited history. However, even one missed payment can be reported and damage your score, sometimes as severely as a default on a larger loan. The key is to treat BNPL as a serious credit product: use it for planned purchases and never miss a payment due date.
Master the Credit Utilisation Ratio
Your Credit Utilisation Ratio (CUR) is the percentage of your available credit that you use. It's a major factor in your CIBIL score. Lenders prefer to see a low ratio, as high utilisation can signal financial stress. The general rule is to keep your usage below 30% of your total credit limit. For example, if your credit card limit is ₹50,000, you should aim to keep your outstanding balance below ₹15,000 at all times. Paying your balance in full each month is the best habit, but if you must carry a balance, keeping it low shows lenders you aren't overly reliant on credit.
Become an Authorised User
Another strategy is to ask a parent or close family member with a long and positive credit history to add you as an authorised or add-on user on their credit card. When you are added, the primary cardholder's payment history for that account can start appearing on your credit report. If they have a history of on-time payments and low credit utilisation, this can give your score a significant boost by adding a well-managed account to your file. However, be aware that this can also backfire. If the primary user misses payments or carries a high balance, that negative information can hurt your score as well.
Focus on Consistent, On-Time Payments
This is the single most important rule of building credit. Your payment history is the most heavily weighted factor in your CIBIL score. It doesn't matter whether the payment is for a tiny consumer durable loan, a BNPL instalment, or a credit card bill—paying it on time, every time, is fundamental. Even small, consistent payments build a powerful track record of reliability. Set up auto-pay for at least the minimum amount due on all your credit products to ensure you never miss a deadline by accident. A long history of punctual payments is what ultimately convinces lenders that you are a creditworthy individual.
