A healthy credit profile has become a quiet but powerful financial advantage in India. In 2025, credit bureau data showed that over 30% of loan rejections were linked to low or inconsistent credit scores rather than income issues.
Whether you plan to apply for a loan, a credit card, or simply want better financial flexibility, learning how to improve CIBIL score is now essential. The good news is that improving your score does not require drastic changes, just consistent, practical habits that build trust over time. Read this blog to learn more!
Why Does Your CIBIL Score Matter?
Your CIBIL score is a three-digit number that reflects how responsibly you manage borrowed money. It acts as a quick risk indicator for lenders when they assess your loan application.
A strong score matters because it directly influences key borrowing outcomes, such as:
- Faster loan approvals with fewer follow-ups.
- Access to lower interest rates and flexible tenures.
- Higher chances of negotiating better loan terms.
- Easier approval for unsecured products like a Personal Loan.
Lenders increasingly rely on credit behaviour patterns, not just income levels. This makes it even more important to maintain a consistent repayment history and balanced credit usage. When your credit profile reflects stability, it becomes easier to unlock financial opportunities without friction.
Practical Habits to Improve CIBIL Score in 2026
Improving your credit score is about building habits that signal reliability to lenders. Below are some of the most effective and proven ways to improve CIBIL score in India when followed consistently:
1. Pay All EMIs and Credit Card Dues on Time
Timely repayment is the single most influential factor in your credit score. Even one missed payment can stay on your credit report for years.
To stay on track:
- Set up auto-debit features for EMIs
- Keep reminders a few days before due dates
- Pay at least the minimum amount due if cash flow is tight
Regular on-time payments steadily rebuild trust and create a positive repayment history.
2. Maintain a Healthy Credit Utilisation Ratio
Credit utilisation refers to how much of your available credit limit you actually use. Experts recommend keeping this below 30%.
For example, if your card limit is ₹1,00,000, try not to exceed ₹30,000 regularly. High utilisation signals overdependence on credit, even if payments are on time. Reducing usage gradually, instead of closing cards, is often a smarter approach.
3. Avoid Multiple Loan or Card Applications
Each loan or credit card application triggers a hard inquiry on your credit report. Too many enquiries within a short period may indicate financial stress.
If you are planning to get a credit card in 2026, spacing applications and checking eligibility beforehand is one of the most practical credit score tips for 2026 that you must follow.
4. Review Your Credit Report Regularly
Errors in credit reports are more common than many borrowers realise. Incorrect outstanding balances or wrongly marked late payments can drag down your score. Make it a habit to check the following:
- Check your CIBIL score and detailed report at least once every 30-45 day.
- Dispute inaccuracies immediately through official channels
- Track changes after disputes are resolved
Correcting errors alone can sometimes improve your score significantly.
5. Keep Old Credit Cards Active
Older cards help build credit history length, which plays a role in score calculation. Closing your oldest credit card may shorten your credit history and reduce your score.
Instead of closing unused cards, use them occasionally for small transactions and clear dues on time.
6. Maintain a Balanced Credit Mix
A mix of secured loans (like home or vehicle loans) and unsecured loans (like Personal Loans or credit cards) reflects responsible borrowing behaviour.
An unbalanced portfolio heavily tilted towards unsecured credit may be viewed as riskier by lenders.
7. Settle Dues Properly
Settling a loan for less than the outstanding amount may offer temporary relief but can negatively impact your credit profile.
Wherever possible, aim for full repayment. If settlement is unavoidable, rebuild your score gradually through disciplined repayment behaviour after closure.
When followed together, these habits steadily boost credit health without creating financial strain.
How Long Does it Take to Improve CIBIL Score?
There is no universal timeline, as credit improvement depends on your current profile and past behaviour. However, in most cases, a 50-point improvement is achievable within 6 to 12 months.
Here are several factors that influence this timeline:
- Severity of past defaults
- Consistency of recent repayments
- Reduction in credit utilisation
- Correction of reporting errors
Borrowers with minor delays or high utilisation often see faster improvements once habits change. On the other hand, serious defaults may require a longer rebuilding period.
To Conclude
Improving your credit profile is less about complex strategies and more about everyday financial discipline. By following simple habits such as timely repayments, controlled credit usage, and regular report checks, you can steadily improve your CIBIL score in the New Year and strengthen your overall financial standing.
FAQs
What is considered an excellent CIBIL score?
A CIBIL score of 750 or above is generally excellent and improves your chances of loan approval at favourable interest rates.
What is the difference between a credit Score and a CIBIL Score?
A credit score is a generic term used by multiple bureaus. A CIBIL score specifically refers to the score generated by TransUnion CIBIL, which is widely used by Indian lenders.
How long does it take to improve my overall credit score?
You can see minor improvements within 1 to 3 months, while significant changes may take 6 to 12 months, depending on past credit behaviour.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply