Your CIBIL score is a three-digit number between 300 and 900 that summarises how you have handled credit. Most lenders treat 750 and above as a strong score. Here is what goes into it.
1. Payment history — the biggest factor
Paying every EMI and credit card bill in full and on time is the single most important thing. One missed payment can pull your score down, and a default or settlement stays on your report for years.
Do this: set up auto-debit for every EMI and at least the minimum due on each card.
2. Credit utilisation
This is how much of your credit card limit you use. Using ₹80,000 of a ₹1,00,000 limit (80%) signals stress even if you pay in full.
Do this: keep utilisation below about 30% of your total limit.
3. Length of credit history
A longer track record gives lenders more to go on. Your oldest accounts help your score.
Do this: think twice before closing your oldest credit card, especially if it has no annual fee.
4. Credit mix
A healthy mix of secured loans (home, vehicle, gold) and unsecured credit (personal loans, cards), all well managed, reads better than a file full of only unsecured credit.
5. Recent credit enquiries
Every time you apply for a loan or card, the lender makes a hard enquiry. Several in a short span can suggest you are credit-hungry. (Checking your own score, or checking offers on PaisaFin, is a soft enquiry and does not affect it.)
How fast does it change?
Lenders now report to credit bureaus every fortnight, so good behaviour shows up faster than it used to. Still, rebuilding after a missed payment takes months of clean repayment.
Check your report for errors
You are entitled to a free full credit report from each bureau once a year. Look for accounts you don't recognise, wrong outstanding amounts or closed loans still shown as active, and raise a dispute with the bureau if you find one.
- Credit score
- CIBIL