When you apply for a loan or credit card, lenders check your credit score. In India, the best-known score comes from CIBIL and ranges from 300 to 900. Generally, a higher number is better, and many lenders look for a score of around 750 or above.

What goes into your score?

  • Payment history: paying EMIs and card bills on time matters most.
  • Credit use: using a large share of your card limit can pull the score down.
  • Length of credit history: older, well-managed accounts help.
  • Types of credit: a healthy mix of secured and unsecured credit is viewed favourably.
  • New applications: many applications in a short time can lower your score temporarily.

How to improve it

  1. Pay every EMI and card bill on or before the due date.
  2. Keep card usage well below the limit.
  3. Avoid applying for several loans or cards at once.
  4. Check your credit report regularly and get errors corrected.
  5. Be careful when acting as guarantor: missed payments by the borrower can affect you too.

How often should you check?

Consumers can request their credit report from the credit bureaus, and checking your own report doesn’t hurt your score. Looking at it once or twice a year helps you spot mistakes early.

This article is for general information only and isn’t financial or legal advice. Chit fund rules differ from state to state, so always check the requirements that apply where you live.