Your credit score, and how to fix it

Your credit score is a three-digit summary of how reliably you have repaid borrowed money. In India four bureaus maintain it — CIBIL, Experian, Equifax and CRIF High Mark — and lenders usually pull one or two. Scores run from 300 to 900, and the difference between 720 and 780 can be worth lakhs over the life of a home loan.

What the bands actually mean in 2026

• 800 and above: the lender's floor rate, fastest approval, highest limits
• 750–799: best published rates at most banks — this is the practical target
• 700–749: approved, but priced 0.5% to 2% higher and scrutinised harder
• 650–699: mainstream banks hesitate; NBFCs approve at a premium
• Below 650: most unsecured lending is declined. Secured options — gold loan, loan against property, or a secured card — remain open

What actually drives the number

Repayment history, around 35%. One payment thirty days late can cost 50 to 80 points, and it stays on your report for years. Nothing else matters as much.

Credit utilisation, around 30%. The share of your card limits you are using. Keeping it under 30% is the single fastest lever available — it can move your score within one or two billing cycles.

Credit age, around 15%. Older accounts help. Closing your oldest card to "clean up" actively hurts you.

Credit mix, around 10%. A blend of secured and unsecured credit reads better than cards alone.

Recent enquiries, around 10%. Each formal application is a hard enquiry. Several in a short window signal credit hunger.

The fixes, with honest timelines

• Pay down card balances below 30% of the limit — visible within 30 to 60 days. The fastest lever there is.
• Set up auto-debit for every EMI and card minimum — prevents the damage that takes years to undo
• Ask for a credit limit increase and do not spend it — utilisation falls immediately without repaying anything
• Stop applying for three to six months before a major loan application
• Dispute errors on your report — bureaus must resolve within 30 days, and errors are more common than people expect
• Keep old cards open, using them lightly, to preserve credit age

Things that do not affect your score

Checking your own score is a soft enquiry and never hurts it. Your income, savings balance, investments and salary account do not appear in the score at all — lenders assess those separately. A high salary does not compensate for a poor repayment record.

If you have no score at all

A thin file is not the same as a bad one, but it produces the same refusals. Build a record with a secured credit card against a fixed deposit, or a small consumer durable loan repaid on time. Six months of clean history is usually enough to generate a workable score.

Settlement is not closure

If a lender offers to "settle" a defaulted account for less than the balance, understand what you are accepting: the account is reported as settled, not closed, and that marker is severely damaging for years. Where you can, negotiate a full payment plan and get written confirmation that the account will be reported as closed.

Frequently asked questions