Guides / Credit Score: How It Works and How to Improve It

Credit Score: How It Works and How to Improve It

Your credit score is a number, usually between 300 and 900, that tells lenders how reliably you repay. A higher score can mean faster approval and a lower rate.

What affects it

• Payment history: paying on time matters most.
• Credit use: using a small share of your card limit looks better.
• Length of history: older accounts help.
• Mix of credit: a healthy mix of loans and cards.
• New applications: many applications in a short time can lower your score.

Why it matters in rupees

Take a ₹30 lakh loan for 20 years.

A 0.5% higher rate costs about ₹2.3 lakh more. Compare options in the Loan Eligibility Calculator.

How to improve it

1. Pay all EMIs and card bills on time. Use auto-pay.
2. Keep card use low. Staying under about 30% of the limit is a common guide.
3. Do not close your oldest card unless you must.
4. Limit new loan applications.
5. Check your report for errors and ask the credit bureau to fix them.
6. Be patient. Scores improve over months, not days.

A score of 750 or more is commonly seen as good, but each lender has its own rules.