A credit score is like the ICC ranking system for top teams worldwide in the sport of cricket. The most recent performance always matters.

Or to be more relevant, your most recent credit scores are most pertinent. The go-to solution for this matter would be to pay your bills on time.

But, however soon you pay your bills, the amount of debt that has been incurred over the one month period also plays a major impact. Spending low, and paying faster helps in this situation.

You may be wondering what the other methods to improve your credit score are.

Building up your credit score isn’t particularly a simple or quick process. credit score spectrum

Here are  6 methods that you can implement to improve your credit score considerably.

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  1. Keep Your Payment History Clean

man working with calculator with loan graph

    The one major aspect that lenders will be worried about when you apply for a loan is your credit score. And what factor influences them to think whether you’ve got your finances all worked out or not? Your payment history. Paying your bills every month on time can highly influence your CIBIL (Credit Information Bureau India Limited) score.

This isn’t just limited to credit card bills, however. Paying all your bills on time, like your phone bills, rent, your existing loans, et cetera, will really ensure that you can be trusted with loans, and upping your credit limit.

It also would not make a huge impact if you had paid all your bills and loans on time previously, but the past couple of times you haven’t, because, as was mentioned in the beginning of this article, your recent history is the most important of all factors.

  1. Maintain a Good Credit Utilization Ratiocartoon hand holding a credit card

    Maintaining your Credit Utilization Ratio is another important factor in improving your credit scores. The credit utilization ratio or CUR, amounts to your total credit card balances divided by the total amount of credit available to you.

Lenders usually recommend that you have it somewhere in the range of 30%. Utilizing only 30% of the total credit available to you sends across the message that you manage your finances very well.

On the other hand, if you do use your credit card more, it will positively impact your credit score.

The key here is balance. If you do spend more, and are regularly paying off your debts with ease, then you should be facing no problem whatsoever.

  1. Try Reducing the Number of Credit Applications You Make

    Banks try to advertise new credit cards on top of your existing ones on the basis that it will grant  you more discount when you use it at particular places. For example, there is an Indian Oil Card provided by Citibank which adds points to the card, every time a person uses it at an Indian Oil Petrol Station. The points can later be redeemed to fill petrol.

Though this may seem filled with advantages in the short run, your overall credit score takes a hit every single time you apply for a new credit card.

This is due to the fact that inquiries are made to your existing bank, with which you already have a credit card. There are two types of inquiries, hard and soft.

Hard inquiries will shed off 3 to 5 points for every new application you make. You should however ask the lender why the inquiry was made, if he/she had made hard inquiries.

On the other hand, soft enquiries really don’t affect your credit scores and are generally made by banks when you are looking for a higher line of credit.

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  1. Don’t Cancel Your Unused Credit Cards

    Some people have the habit of closing down unused credit cards. The unofficial logic behind this is that it would improve your credit scores.

While it may momentarily help you in doing so, in the long run, since you have a limited amount of credit cards, you may not be able to effectively split the amount you spend overall. This could have a major impact upon decreasing your credit scores!

  1. Request and Check Your Credit Reportchecklist of things to do and avoid before taking a loan

    It is possible to request your bank for your own personalized credit report. Opt for this as it gives you an analyzed report of your credit card usage, and other analytics.

As long as you acquire it from authorized sources, it would not affect your credit scores. CIBIL provides these services at a small fee.

  1. Ensure That You’re Not a Victim of Fraudulent Activities

    There has been a purchase in your account amounting to 1 lakh rupees, and you have no idea how that came to be. Definitely there’s been some malice in your account.

Report to your bank immediately and they would be able to replace your card, and not consider the credit score increase or decrease that had transpired. If you don’t report this, you would be forced to pay off the debt for something that you didn’t purchase yourself.

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There really isn’t a said method to implement to improve your credit scores, nor are there shortcuts. Balancing your credit usage along with your debit usage, and how you do it is what matters in the end. As mentioned in the article, you may lose some points sometimes, but it is really easy to build upon those lost points in the future through taut thinking and apt planning.

Know any other methods to improve your credit scores? Let us know in the comments below!loan banner hyperlink

Adithya Siva is an engineering graduate with a passion for writing and filmmaking. His hobbies include reading, gaming and occasionally writing mostly depressing poems in the style of Charles Bukowski. He is a fan of Stephen King and considers the works of Truman Capote to be his fundamental inspiration to write. While his inspiration to write comes from Capote, his passion for films sprout from the works of Martin Scorsese, Mani Ratnam and Quentin Tarantino, whose methodologies he wishes to incorporate into a film that he one day hopes to write and direct. You can reach out to him at: adithyasivas@gmail.com


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