How to Repair and Maintain Your Credit Score (CIBIL)

The Key to Cheaper Capital

Your credit score, commonly known as your CIBIL score in India, is your financial passport. It is a 3-digit number ranging from 300 to 900. The day you apply for a home or car loan, the bank pulls this score. A score of 750+ opens doors to instant approvals and the lowest interest rates. A low score leads to immediate rejection or high-interest penalty rates.

How to Repair a Broken Score

If your credit score is in the red, don't panic. You can repair it by following a disciplined plan:

1. Pay every single credit card bill and EMI on time. Even a single day's delay can drag your score down.

2. Keep your Credit Utilization Ratio below 30%. If your credit card limit is ₹1 Lakh, try not to spend more than ₹30,000 in a month. High utilization signals desperation to banks.

3. Resolve any errors on your CIBIL report by raising a dispute on their website. Sometimes, closed accounts are mistakenly marked as active defaults.

Avoid the Hard Inquiry Trap

Every time you apply for a credit card or loan, the lender conducts a 'hard inquiry' on your profile, which temporarily lowers your score. Avoid applying to multiple banks simultaneously. Space out credit applications by at least 6 months to maintain a healthy credit profile.