Claim Your Keys to Financial Freedom: Improve Your Credit Score to 800+

Achieving true financial freedom becomes much more attainable when your credit score crosses the 800 mark along with a good credit history. At this level, you unlock lower interest rates, faster loan approvals, and access to premium credit offers. Building such a score is not difficult; just nurture healthy financial habits like paying bills on time, keeping your credit utilisation under 30%, and using credit wisely. Take control of your finances and open the door to unlimited financial possibilities. Read this blog to learn how you can level up to more than 800 credit score

7 Foolproof Tips on How to Increase Credit Score to 800+

There are certain things to avoid in order to set yourself up for success in achieving that 800+ credit score! A good place to start would be by stopping yourself from maxing out your credit cards, ignoring credit reports or falling for ‘credit repair’ scams. 

There are no shortcuts when it comes to building your credit score up to reach that 800+ elite level. Here are some consistent practices to follow:

1. Complete Your Repayments as Per Schedule 

Late/missed payments severely damage your credit score. Even a slight delay in a loan or credit card repayment can trigger a major setback. So, prioritising consistency by making timely payments on or before the due date can greatly help improve your credit score and overall credit history.

Avoid future missed payments by setting up auto-debit systems, having reminder apps, and ensuring that you pay at least the minimum due for credit cards every month. 

2. Keep Credit Utilisation Ratio Below 30%

If you're using up most of your credit limit each month, your lenders deduce that you're entirely dependent on credit. A high credit utilisation ratio isolates you as a rather risky borrower, even if you pay off the entire amount on time. 

So, avoid high credit utilisation and request a higher credit limit to lower your overall utilisation ratio. Strictly keep usage under 30% of your total credit limit at all times. For instance, if your credit card limit is set to ₹1,00,000, don’t exceed ₹30,000 within a billing cycle.

3. Maintain a Healthy Credit Mix of Secured & Unsecured Credit

Possessing a single type of credit, such as just a loan or credit card can pose a challenge if you’re trying to increase your credit score. Instead, a diverse credit mix featuring various credit types shall demonstrate to the respective lenders that you can manage various financial obligations responsibly and lead to a good credit score.

Maintain a healthy mix of secured credit (car loans) and unsecured credit (credit cards) to positively impact your CIBIL score.

4. Avoid Too Many Credit Enquiries in a Short Time

Whenever you apply for a loan or credit card, it reflects as a hard inquiry on your credit report. This hard inquiry negatively impacts your credit score, leading to a temporary drop. Several inquiries at a time can impact your credit score severely. That’s why it’s advisable to avoid the tempting 'pre-approved' offers if you don’t really need them.

5. Clear Any Outstanding Debts/Dues

Outstanding debt, like the long-pending EMIs/credit dues, negatively impacts your payment history. This, in turn, affects your CIBIL score. These appear as red flags to lenders, even if the amounts are minimal. In case your credit report displays unpaid dues/overdue accounts, clearing them can vastly raise your CIBIL score. 

6. Keep Older Accounts Active in Credit History

Old accounts which show a longer credit history help build trust with the lenders. A longer credit history demonstrates consistent repayment behaviour and reliability. So, keep old credit accounts active if possible. Make it a point to use them occasionally (remember to pay them off in full).

7. Regularly Monitor Your CIBIL Report 

Outdated details, mistakes or even identity theft can knock your CIBIL score down without you even realising it. So, routine checks of your CIBIL report shall allow you to stay on top of the issues and resolve them early on. Aim to check your credit score once each month/quarter to ensure the details are updated. Raise a dispute with CIBIL if any discrepancies are detected.

Categorisation of CIBIL Score Ranges: Which Score is Considered Good? 

A good credit score can help improve Personal Loan eligibility as well as negotiate better loan terms, lower interest rates on loans, and unlock higher rates of approval. It shall empower you to achieve your long-term financial goals without the associated hassle. This boasted score shall be a reflection of your creditworthiness, painting a reliable picture of you as a financial being in the eyes of lenders. 

Mistakes to Avoid While Rebuilding Your Score

Here are a few mistakes to avoid as you increase your CIBIL score:

• Paying only the minimum due amounts for an extended period

• Frequently maxing out your credit cards

• Ignoring your credit report

• Falling for ‘credit repair’ scams or shortcuts

How Long Does it Take to Improve Your CIBIL Score?

The journey of learning how to take your credit score to 800+ requires patience and consistent effort. Overall, it could be a few years before your actions reflect a reliable credit history. The good news is that positive changes can be seen sooner than you might expect!

• Quick corrective actions like clearing outstanding dues on previous personal loan accounts, paying credit card bills on time, and reducing credit utilisation below 30% can show impact within 1-2 months.

• Consistent on-time payments and maintaining low credit utilisation will show sustained improvements over 3-6 months.

Finally, it's important to remember that while improvements can be seen in 3-6 months, consistent discipline once you increase your credit score should be a long-term commitment for lasting results. A higher credit score makes loan approvals a breeze, and you can also benefit from favourable terms like lower interest rates across several lenders.

To Conclude 

With the right steps, a little discipline, and a clear plan, you can improve your credit score to cross 800+. Remember, your credit score is not just a number; it vouches for your financial discipline. So, if you want to improve your score, set reminders, review your CIBIL report regularly, stick to smart credit usage, and stay patient.

Be committed to these habits, and you’ll begin to see steady progress toward stronger financial health. Check your credit score for free on the Poonawalla Fincorp website and embark your journey toward a good credit score today.

FAQs

How long does it take to improve a CIBIL score?

It may take up to 3 - 6 months of consistent effort to see a rise in score. The timeline may vary as per your credit history, severity of issues, etc.

Does closing a credit card affect a good credit score?

No, the opposite’s the case! Closing a credit card will reduce your total credit limit and cut your credit history short. Keep your old cards open and use them occasionally by prioritising full repayments.

Is checking my credit report frequently bad for my score?

No, checking your credit report frequently initiates a soft inquiry, which has no negative impact on the CIBIL score. Regularly checking your credit report helps you identify errors, track progress, stay informed and maintain a positive credit health.

Can I get a Personal Loan with a 600 CIBIL score?

It is highly impossible to secure a Personal Loan with a 600 CIBIL score as it is considered poor. Even if a lender approves, most likely you'll receive approval at higher interest rates, stricter terms, and lower loan amounts as lenders consider it a fairly risky trade. 

How much can my CIBIL score improve in one month?

You can improve your credit score by 20-50 points in one month if you take immediate corrective actions like clearing outstanding dues and reducing credit utilisation below 30%. Significant improvements typically require 3-6 months of consistent behaviour and a healthy credit mix.

Does increasing my credit limit help improve my credit score?

Yes, a higher limit helps to reduce your credit utilisation, but this solution would still depend on your credit usage. Keep the ratio low and practice financial discipline to improve your CIBIL score.