Do your credit card, personal loan, home loan applications rejected recently? One reason for such rejection might be your low CIBIL Score. This makes your life mess as you can’t do anything immediately to improve it. But there is always solution for a problem. So even though it takes time but you will definitely can improve it.  In this post I will highlight the points which are very much important for increasing your CIBIL Score.

Improve Credit Score

1) Check CIBIL Report-Before judging anything, first apply for the CIBIL report. It usually takes 2-3 days to get it at your mail id. Once you received it then check for all your personal details like name, age, PAN Number or date of birth for it’s accuracy. If you find anything missing then report the same to CIBIL and get it first corrected.

Review your credit report 3-4 times a year. If you found anything wrong then this process of regular checking will actually alter your bad financial habit also any discrepancy in report.

Then check for loans or credit history that are named under you. If you found any discrepancy in the same then you can report it to CIBIL. This is the first step which can be easily rectified without acting on any other steps.

2) Restrict your utilization-If you have credit limit of Rs.1,00,000 then it is not a best way to utilize the whole amount. Exactly like if you are eligible for home loan of Rs.1 Cr then it does not mean that you must have all Rs.1 Cr as loan. Based on your requirement always makes sure to use less. This will improve your score. Because lower credit means lower EMI and this will easily improve your credit score.

3) Late Payment-This may one of the major reason for bad score. So always makes sure to pay your EMI or credit balance in time. Few neglect it and afterward try to bargain with credit providers. Once they settled for the amount which was lesser than total due, they feel happy that they saved something. But in reality it is really affecting their credit score.

Keeping alerts in your mobile, Google Calender or through any other means can really makes your life easier and pay within time. Also make sure that you drop the cheque before 4-5 days earlier than actual due date. Because cheque collection from bank and credit of amount to actual card provider may take time, which in return will be considered as late payment. Hence better to pay in advance if you are planning to pay through cheque.

4) Mix of Credit-Don’t over expose to any one type of credit like unsecured loans or high number of credit cards. Instead always have all credits like home loan, car loan, personal loan or credit loan. Exposing more towards unsecured loans such as credit cards or personal loans will actually give an image of negative credit history. So always utilize the mixture of secured and unsecured than over exposing towards unsecured.

5) Apply for credit with pause-Uninterrupted credit applications may actually considered as “CREDIT HUNGRY”. Instead always apply if you are actual need. If you do so then it shows that your current finance are at mess and you are desperate to get credit at any means whether it is from personal loan, car loan or utilizing the credit card. So this may harm your credit score and may be the reason for rejecting your loan application. Hence be caution while inquiring or applying for new credit.

6) Think twice before closing credit cards-It is usually believed that having too many credit cards or using all of them believed to be bad financial behavior. But at the same time having unused credit card implicate sound financial life. So think twice before closing any unused credit cards. Also closing any card with balance due may be considered as negative. So first clear the dues and think twice of closing unused cards.

7) Check co-signed or Joint Accounts-If you became the guarantor to your friend’s loan or having account with second or third holder of that credit then make sure all credit dues will be paying in time. Even though in plain it seems that you no longer a first holder or the loan applicant, bust till you being guarantor or joint account holder will actually be makes you equal responsible.

So check regularly where you as a guarantor or joint account holder of any loan accounts. Otherwise it may impact your own credit score.

8) Pay dues fully-Always try to pay your dues fully. Usually credit card send you the bill showing the minimum amount you are eligible to pay. But the remaining amount is considered as overdue which will again affect your CIBIL score. Hence always try to pay your credit card bills fully.

9) Professional Help-If you messed up in bad credit then you can seek your planner help or someone whom you feel knowledgeable in financial field. This sharing of your bad financial life may sometime give you an idea which you never thought. Hence never hide anything wrong you have about credit and share the same. Who knows your idle cash, asset or investment may makes you come out of credit 🙂

10) Patience is mantra-By following above rules it does not guarantee or improve your score overnight. Instead following the above rules throughout your financial life will actually improve your CIBIL score in long run and makes you a responsible person. Hence do follow above simple steps and improve your score !!!

Image courtesy of [ Stuart Miles] /

32 Responses

  1. My cibil score is 829. My wife and i both have hdfc money back credit card. I had taken this card 3 years ago. I am thinking only one hdfc card is sufficient, so , wants to close my credit card. Please advise, closing this card is good or not? does it effect my cibil score.

  2. Dear Sir,

    One free report per year means one report per calendar year or one report per financial year ?

    Thanks in advance

  3. I have messed up my credit history 7 years back settled 4 credit cards and two p loans now i have 854 as cibil score but banks rejected my application for a credit card. Please advice.

    1. Banks reject card if you have a business and approve cards if you a salaried person….. this is my personal experience….

  4. Hi,

    I am following your blog for quite a while and all articles are very useful. Kindly clarify my below queries.

    1) As you mentioned if any cheque gets bounced our CIBIL score will be reduced. Any idea like how many points approximately will be reduced.

    2) I applied for SBI credit card and got it but they have given me less limit than they promised. So, I deactivated it without using. Will it effect my CIBIL score.

    3) If we have more loans and credit cards but paying all installments without any delay will it reduce CIBIL. (I am having 3 loans and 3 credit cards and paying all bills in time without any delay).

    4) I received a cheque from my friend which I deposited in my savings bank account. It got bounced whether it will effect my CIBIL score.

    Thanks in advance,

  5. I am Davis. I have taken a education loan Rs.160000 in 2007. Initially I paid interest till 2011. and then I paid some amount & totally Rs80ooo paid. Then after due to some financial problem and jobless I unable to pay the balance amount. this month (feb,2015) I checked the loan details and I came to know that the total due amount now is Rs.250000.

    Recently I have checked my CIBIL score but it is not eligible to get personal loan.

    So what we can do for improve my CIBIL score? Shall we pay full amount in single due or pay monthly due?

    shall we pay if bankers reduce loan amount from 250000 to 150000 (but one condition pay within 2 months)? If we pay like this whether CIBIL score affect?

    Please give your valuable reply.

    thanks & regards
    Davis Julian
    my email id [email protected]

      1. Hi Sir

        i took credit card 2006 limit 20,thousand i used 20 thousand i paid amount 5 thousand only but interest and all 2012 all together 65 thousand , because of this reason affected my CIBIL score , 4 moths back i checked my CIBIL score 598 is there how to improve my CIBIL Score and i recently i paid my educational loans , i have clearance certificate also. please me how to improve CIBIL score , actually i applied credit card ,credit banks rejected my application. please help me.

  6. Hi Sir,

    One question! If we increase the credit card usage limit what will happen? will it affect our credit score? if yes, will it be positively or negetively?

  7. dears sir
    I would like to apply nri home lone i just last month closed my exiting lone from hdfc please kindly inform my emil id
    kindly inform me my emil id
    Thank you
    your sincerely
    h/p 0065-84815923

  8. Hello .
    I am Raju.I have taken a tw wheeler loan amount of Rs.28500 with 24 emi of Rs.1450 in sep 2009.Intial I paid almost 15 EMI.Then after due to some finacial problem I was not able to pay the remaing EMI in time and stoped paying the EMI.Last month I enquired the loan details and I came to know that the tottal due amount now is Rs.27000.Last month I paid 2 EMI.This month also I paid one EMI.The bank people are asking me to make a one time settlement of Rs.15000.This month I have checked my CIBIL report,where my score is 613 and in my loan status details they mentioned it as Written off.
    So I am seeking your advice on this matter .what I should do now..?Shall I clear all the dues or shall I go for settlement.?Which way I can improve my cibil score.?Please advice me.If u need my cibil report then please gv me ur mail ID I will send you that one.
    Please help me on this matter.

  9. Well written. Keeping check on personal credit report and maintaining Discipline in payments definitely helps one in improving credit score.
    One more thing I would like to add is that if one is in urgency of loan, he/she may buy Credit Score from CIBIL by paying certain fee instead of waiting for the score to improve.

  10. I don’t understand who idiot has introduced this CIBIL. Why customer should pay Rs 250? If he want CIBIL giving wrong score [90 % time they give wrong report] Why there is no penalty CIBIL officer or to the whole department. Why financial advisories do not report anything to government regarding loot by CIBIL.
    Does Vijay Mallya or any other top 10 debts of PSU banks has any CIBIL score if not then why poor people should pay fee to these idiot peoples.

    You are taking any initiative for poor and loyal indian peoples who regularly pay there loan in case they taken loan.
    Where is our consumer protection laws.

  11. Hello,
    As usual a good and useful article from you. Appreciate efforts you are taking to generate the Finance knowledge among the people

    I got the score recently and its good score (Applied after reading the article). But the details like Name, Passport are not as per the latest (Reflects details of 2006 with some spelling mistake). How to update the same

    And Few credits card which are cancelled not updated in the report. Do I need to act on this?

    In the enquiries, I saw a detail for 10 crore in 2007 from old public sector bank. What could be related to this? I haven’t made any attempt for that huge amount.
    Kindly share your view


    1. Anbu-Please contact CIBIL and update the same as soon as possible. Also inform about the credit cards which you cancelled but still showing in report and also about the huge detail of Rs.10 Cr. Act it immediately without any delay.

    2. 1. We will purchase a detailed CIBIL report (CIR) on your behalf.

      2. We will be analyze your Credit History & Credit Score.

      3. A detailed plan will be drafted to resolve any discrepancies first i.e., (you might have paid all the dues to the financial institutions and information in CIBIL is wrongly updated. We will fix the errors on your credit report)

      4. Then we will check about the defaults / overdue amount to be paid by you to the financial institutions.

      5. We will first check with you (since when you have defaulted or not paid the amount to the financial institutions)

      6. Then we will check with the bank about the closure amount.

      7. After paying the closure amount to the creditors.

      8. We will get you the closure letter/ No due certificate letter from the bank.

      9. We take the complete responsibility of the documentation for closure.

      10. We also ensure the CIBIL update is done by the bank. And whichever information’s are not updated in the report we will get it updated in the report.

      11. For the score to improve there must be running loan or credit card so we will get you a pre paid card for the score improvement and monitor for the score

      12. After updating all the records in CIBIL, your CIBIL will be cleared & then loans should not get declined.

      :-collects and maintains your personal information and records of your payments pertaining to loans and credit cards. This information is then used to create credit information report(CIR)and credit scores which are provided to lenders in order to help evaluate and approve/reject loan applications/credit cards
      Major factors affects for credit score

      1 Payment history.

      2 High utilization of credit limit.

      3 Higher percentage of credit cards or personal loans(also known as unsecured loan).

      4 Many new accounts opened recently.
      Different types of ownership seen in the cibil report
      1. Single 2.Joint 3.Authorized User 4.Guarantor
      Causes of negative or bad credit history
      Irregular payment history, Write-offs and Settlements, High Current Balances, High number of Enquiries.
      Collection Agents
      :-In a word, NO.Many Collection agents use aggressive tactics in an effort to frighten you into paying them directly. Some will claim that they will not work with a settlement company or third party. Others will try to scar
      e you into not working with settlement companies because they “will rob you of your money”. These are nothing more than scare
      -tactics because they know they will get more money out of you are forced to deal with them directly. If you are contacted, simply tell them that you are i enrolled with Debt Doctor for Debt Negotiation and settlement services, give them the telephone number of our help line(Which you will receive after enrolling),and then simply hang up. You are paying us to handle the dirty work, s
      o don’t take more
      burden on your shoulders than you have to!

      :-We will get the cibil report. Our CIBIL Management service includes analysis of your CIBIL report, steps to resolve any discrepancies, including its rectification. Further we assist individuals to increase their credit score and overall credibility in terms of credit worthiness clearing.

      For Further Details Contact : Syed Arif : 9535385135

  12. Hello,

    I am a regular reader.. A friend of mine applied for a home loan for 18 lakhs. He is an NRI. But he paid his loan in 2 years in full. Apart from that he has never taken loan. Though he has a credit card..he hardly uses it. Even when he uses it, he repays the amount in next 4-5 days after the transcation reflects in his account.

    How to calculate his credit score.


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