In today’s financial world, your credit score is like a financial passport. Whether you want to take a home loan, personal loan, or car loan, banks and NBFCs first check your CIBIL score (or any other bureau score). A score above 750 is generally considered good and makes loan approval faster, easier, and cheaper (with lower interest rates).
But what if your credit score is below 750? Don’t worry—there are smart strategies you can follow to improve your score and increase your chances of getting approved.
What is a Credit Score?
A credit score is a three-digit number (300–900) that reflects your creditworthiness. It is calculated based on your repayment history, credit usage, number of active loans/credit cards, and other financial behavior.
750 & above – Excellent (easily approved for loans)
700–749 – Good (can get loans, but not the best deals)
650–699 – Fair (chances of rejection are higher)
Below 650 – Poor (loan approvals are difficult)
Why a Low Credit Score Creates Problems
1. Loan Rejection – Banks see you as a risky borrower.
2. Higher Interest Rates – Even if approved, interest rates will be much higher.
3. Lower Credit Limit – Credit cards may come with smaller limits.
4. More Documentation – You may need guarantors or collateral.
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Smart Tricks to Increase Your Credit Score
1. Pay Your Bills on Time
Payment history makes up the largest share of your credit score.
Always pay EMIs and credit card bills before the due date.
Even a single default can drop your score significantly.
Smart Tip: Automate payments with reminders or standing instructions.
2. Keep Credit Utilization Below 30%
If your card limit is 1,00,000, try not to spend more than 30,000.
High utilization shows you are “credit hungry.”
Keep balances low to improve your score.
Smart Tip: Ask your bank to increase your credit limit, but don’t increase spending.
3. Don’t Close Old Credit Accounts
The longer your credit history, the better your score.
Closing old credit cards reduces your credit history length.
Keep old cards active by using them for small purchases.
4. Avoid Too Many Loan Applications
Every loan or credit card application leads to a hard inquiry.
Multiple applications in a short time lower your score.
Apply only where you have higher chances of approval.
Smart Tip: Check your eligibility first using loan pre-check tools.
5. Maintain a Healthy Credit Mix
A balanced mix of secured loans (like home/car loans) and unsecured loans (personal loans/credit cards) helps build your profile.
Only unsecured loans make you look risky.
6. Clear Outstanding Dues and Errors
Check your credit report regularly for errors.
If there’s an incorrect default or wrong entry, raise a dispute with the credit bureau.
Pay off overdue EMIs or settled amounts immediately.
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7. Take a Small Loan & Repay on Time
If your score is low, start small.
Take a consumer durable loan or a small personal loan.
Repay on time to slowly rebuild your creditworthiness.
How Long Does It Take to Improve a Credit Score?
Improving your score is a gradual process. With consistent financial discipline:
3–6 months – Small improvements
6–12 months – Noticeable changes
12–18 months – Can cross 750 if you follow good practices
Final Thoughts
Having a credit score below 750 is not the end of your loan journey. By following these smart tricks—paying on time, keeping utilization low, avoiding multiple applications, and maintaining a healthy mix—you can steadily improve your score.
Remember, building a good credit profile is not a one-time task but a long-term habit. The better your score, the easier it will be to access loans at the lowest interest rates.
