Your CIBIL score plays a crucial role in determining your financial health. Whether you’re applying for a loan, credit card, or even renting an apartment, a strong credit score can open many doors. But how can you improve it effectively and sustainably? In this guide, we’ll explore five new ways to increase your CIBIL score in 2025, offering expert insights, practical steps, and real-world examples.
5 New Ways to Increase Your CIBIL Score
| Factor | Impact on CIBIL Score | Actionable Steps |
|---|---|---|
| Timely Payments | 35% | Set up auto-pay, pay bills before due date |
| Credit Utilization Ratio | 30% | Keep usage below 30% of the credit limit |
| Loan & Credit Mix | 10% | Maintain a healthy mix of secured & unsecured loans |
| Avoiding Hard Inquiries | 10% | Apply for credit only when necessary |
| Monitoring Credit Reports | 15% | Check reports regularly, dispute errors |
Increasing your CIBIL score is not an overnight process, but by implementing these five strategies, you can see steady improvements over time. Optimize your credit utilization, pay off small debts, become an authorized user, use credit-building loans, and monitor your credit report regularly. These steps will help you reach a 750+ score, ensuring better financial opportunities.
Why Your CIBIL Score Matters
A CIBIL score (ranging from 300 to 900) represents your creditworthiness. Lenders use it to assess your ability to repay loans. The higher your score, the better your chances of getting loans approved at lower interest rates.
What is a Good CIBIL Score?
- 750-900 – Excellent (Easier loan approvals, lower interest rates)
- 650-749 – Good (Eligible for credit but may not get the best terms)
- 550-649 – Average (Difficult to get approvals, higher interest rates)
- Below 550 – Poor (High risk, loan rejections likely)
If your score isn’t where you want it to be, don’t worry! Let’s dive into five new, actionable ways to increase your CIBIL score in 2025.
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1. Optimize Your Credit Utilization Ratio
What is Credit Utilization?
Your credit utilization ratio is the percentage of your total available credit that you use. If your credit card limit is ₹1,00,000 and you use ₹50,000, your utilization ratio is 50%, which is considered high.
How to Optimize It?
- Keep utilization below 30% – If your limit is ₹1,00,000, keep spending under ₹30,000.
- Increase your credit limit – If you qualify for a higher limit, it automatically reduces your utilization percentage.
- Use multiple cards wisely – Distribute expenses across different cards rather than maxing out one.
Example: Rahul had a credit limit of ₹1,00,000 and consistently used ₹80,000. His score dropped. By increasing his limit to ₹2,00,000 and keeping spending at ₹50,000, his utilization dropped to 25%, boosting his score.
2. Pay Off Small Debts First (Snowball Method)
Why This Works?
Paying off smaller debts first creates momentum and improves your Debt-to-Income (DTI) ratio, which is crucial for loan approvals.
How to Implement?
- List all your debts (credit card, loans, EMIs) from smallest to largest.
- Pay off the smallest balance first while making minimum payments on others.
- Move to the next debt until you’re debt-free.
Example: Priya had three credit cards with balances of ₹5,000, ₹20,000, and ₹50,000. She paid off the ₹5,000 card first, saw an improvement in her score, then tackled the larger amounts.
3. Become an Authorized User on Someone Else’s Credit Card
What is an Authorized User?
If someone with a high credit score and responsible payment history adds you as an authorized user on their credit card, their good credit behavior will reflect on your report.
How to Do This?
- Ask a trusted family member (with good credit) to add you as an authorized user.
- Ensure they have a low credit utilization and strong repayment history.
- Your CIBIL score will gradually increase as their positive history reflects on your report.
Example: Ankit’s father had a credit score of 820 and a 10-year-old credit card. By becoming an authorized user, Ankit’s credit score jumped from 650 to 720 in six months.
4. Use a Credit-Building Loan
What is a Credit-Building Loan?
Unlike regular loans, credit-builder loans are designed to help you improve your credit score. The money you borrow is held in a fixed deposit, and once you pay off the loan, the funds are released to you.
How to Use It?
- Apply for a credit-builder loan from your bank or credit union.
- Make timely payments over 6-12 months.
- Your payments get reported to CIBIL, improving your score.
Example: Meera took a ₹20,000 credit-builder loan for 12 months. By making timely payments, her CIBIL score improved from 610 to 750.
5. Monitor & Dispute Credit Report Errors
Why Is This Important?
Errors in your credit report can wrongly lower your CIBIL score. These may include:
- Incorrect personal details
- Duplicate accounts
- Unpaid loans that you never took
How to Check & Dispute?
- Get a free CIBIL report from CIBIL
- Check for errors or fraudulent accounts.
- Dispute incorrect entries online and get them corrected.
Example: Ramesh found an old unpaid loan on his report, but he never took it. He filed a dispute with CIBIL, got it removed, and his score increased by 50 points.
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5 New Ways to Increase Your CIBIL Score FAQs
Q1. How fast can I improve my CIBIL score?
It typically takes 3-6 months to see improvements, but major changes can take up to a year.
Q2. What happens if I miss a credit card payment?
A single missed payment can drop your score by 50-100 points. Always pay on time.
Q3. How often should I check my CIBIL report?
Check it every 3-6 months to catch errors and monitor improvements.
Q4. Can I get a loan with a low CIBIL score?
Yes, but at higher interest rates or with a secured loan option.
