5 Ways To Improve and Build Your Credit Score?

For credit card users, a good credit score is a major indicator of a healthy financial habit. Therefore, once you start using a credit card or even if you have been using one for a while, to build your credit score should be your number one priority. When you build your credit score, it can provide you with better odds to achieve different credit products at great interest rates. However, it is important to note that building credit is not a one day task. It takes some time and can only be attained through responsible use of your credit card like the repayment of your total outstanding balance on or before the due date for all billing cycles.


Generally, your credit score is the main reflection of your credit and is known as the CIBIL Transunion Score in India. Among Indian credit card users, the score ranges from 300 to 900 wherein the closer the score is to 900, the better your credit is. A high credit score is generally indicative of a healthy financial habit and responsible maintenance of credit. However, if you are new to the world of credit, it can be a bit complex and therefore, the below points can be helpful and assist you in the building of credit generally and to build your credit score specifically.

How to Build Your Credit Score?

  • Apply for and Secure a Credit Card

When stepping into the world of finance and credit, the best bet is to apply for and get a credit card for yourself. It is the primary option available to you as a customer and favors convenience too. It can simplify the efforts taken to build your credit score on your own. You can usually apply for two types of credit cards – secured and unsecured. An unsecured credit card is the more viable alternative but can be difficult to obtain if you are new to credit.

This is because credit card companies mainly judge the credit card applicants based on their credit score and credit history while providing an unsecured credit card. Therefore, as an applicant, you need to build your credit score so that you have a good credit score along with a steady source of income to get an unsecured credit card. If not, then the other alternative would be to opt in for a secured credit card that can be availed at a fixed deposit.

However, SURE negates the need for a secured credit card by providing guaranteed approval to candidates even without a credit score or steady source of income, providing you with a chance to start off and build your credit score with us.

  • Be Regular in your Bill Payments

Paying your bills regularly is the easiest way to build your credit score and makes up a huge part of your credit score. This is because your credit score takes into consideration your on time or late payments and whether you pay your outstanding balances in full or just the minimum amount due. Therefore, the best thing to do would be to pay off your total amount due in full and on time.

This helps you escape late payment fees and interest on the outstanding balance too. It is important to ensure that you know beforehand how you are going to repay your outstanding balance. A convenient solution to this would be to set up automatic debits, at least for the minimum amount due. You can additionally opt in for email or text notifications and reminders via your credit card issuer.

  • Do not Apply for Multiple Credit Cards at the Same Time

A common misconception that you might harbor while applying for a credit card is that multiple credit card applications and maintaining more than one credit card is favorable to build your credit score. However, this is likely to backfire in that if you apply for many credit cards together, you may come across as a risky applicant to the credit card issuer and this may negatively impact your credit score too.

This happens because every time you apply for a credit card, an inquiry reflects on your credit report, irrespective of the fact that the application is approved or rejected. This lowers your credit score for a bit, even though it is temporary. But when you apply for multiple cards at once, this effect multiplies and your credit score may see a drop by a few notches more. Therefore, the smarter choice would be to spread out your credit card applications over a few years and build your credit score gradually.

  • Try to Minimize your Balance to Credit Limit Ratio

When you secure a credit card, you are also given a credit limit for the card which is the maximum amount that you can spend from your credit card. Credit bureaus also take into consideration the ratio of your balance to the credit limit of the card while determining your credit score. This ratio is also known as the credit utilization ratio and is the amount you have used in proportion to the credit limit provided to you by the credit card issuer.

This is also a reflection on how well you can manage the credit that has been made available to you. Therefore, maintaining your credit utilization ratio at a minimum of 30-40% would be favorable to your credit report and credit score on the whole. For example, if your credit limit is Rs. 20,000, your outstanding balance or amount spent should be somewhere between Rs. 6000 – Rs. 8000.

  • Be Regular in the Usage of your Credit Card

The main issue that bars credit card issuers from providing you with a credit card or approving your credit card application is the lack of credit score and credit history. Therefore, to build one, you have to use your credit card in a regular manner. This will result in you building a healthy financial history and credit score over time by using your credit card and making repayments on time. You can use your credit card while making purchases at retail stores or online sites or while visiting restaurants or theatres. This shows that the credit card is active and is being used by the owner on a regular basis.

When you follow or at least try to follow the above steps, you slowly but surely are indulging in responsible use of your credit card and cultivating a healthy financial habit that can help you establish a good credit score and favorable credit history. A good credit score and credit history and assist you in your financial endeavors in the long run. In addition to this, a credit card is a potent financial tool for financial management and once you inculcate the knack of using it in the best possible way, you can enjoy its perks and privileges it offers to the fullest.

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