A credit score or CIBIL score is one of the essential parameters through which banks and lending institutions assess a prospective borrower’s financial health. Lenders use this information to assess how effectively applicants can manage their credit, which influences their decisions on granting loan approvals. A higher score can make it easier to get sanctions for new loans and other types of credit at competitive rates of interest as compared to a low credit score. In this article, we delve into understanding the credit score range and what it means to the lenders and how one can improve a low credit score.
What is a Credit Score?
A credit score or CIBIL score is the summary of your credit history in the form of a three-digit figure ranging from 300 to 900. It is generated by credit bureaus like TransUnion CIBIL, Experian, Equifax and CRIF High Mark by assessing your credit reports.
A credit score of 750 considered ideal. Individuals with such a credit score can have a better chance of borrowing higher loan amounts with the best possible rates and terms. Contrarily, a lower score may fetch you loans of a smaller principal amount and higher interest rates.
The following table displays the CIBIL score range:
Your CIBIL Score | How it translates to the lender |
---|---|
800-900 | An excellent score range that Indicates that you have never defaulted on your EMI and credit bill payments. |
750-800 | A very good CIBIL score with which you can negotiate and bargain on your interest rate. |
625-750 | You have a decent credit history with very few irregularities. You may get a loan but at a higher interest rate. |
300-625 | This score indicates high frequencies of defaults and irregularities. You may find it very difficult to get a loan unless you improve your CIBIL score. |
Note: The CIBIL Score Range is defined as per the industry standards.
Also Read: What is CIBIL Score and How It Works
Importance of a Credit Score for a Credit Card
Just like any other form of credit, when you apply for a credit card, lenders will look up your credit score to examine your creditworthiness and ability to repay debts on time before approving your application. Credit cards can also be used effectively to improve your credit score.
How Credit Cards Affect Your Credit Score
Credit cards can enhance your monetary well-being by boosting a failing CIBIL score. Banks and financial institutions primarily rely on CIBIL scores to determine eligibility for issuing loans or credit cards to customers. Whether you have a low or nil credit history, using a credit card wisely can elevate your credit rating.
Also Read: Boost Your Credit Score by Minding the Factors that Affect It
7 Tips to Increase Your Credit Score with a Credit Card
There are several ways to use credit cards to improve your credit score. If you already own one or even a few of them, bear in mind the following considerations:
1. Make Credit Purchases Smartly
Most people prefer using credit cards to make expensive purchases intending to pay them off later. At times, this can have negative consequences if repayments are not made on time thereby affecting the CIBIL score. Therefore, it’s best to budget smartly and initiate cash transactions whenever possible to avoid exhausting the credit limit. This way you can keep your card usage to a minimum and achieve a favourable credit history with realistic money management.
2. Pay Bills with a Credit Card
You can regularly pay internet bills, phone bills, and utility bills like water and electricity with a credit card to create a positive credit history and bolster your CIBIL score. Since these expenses are much lower when compared to buying material goods, the resultant credit card dues can be comfortably paid off.
3. Make Regular Repayments
Even if you cannot clear the entire amount outstanding on a credit card, try to pay the minimum amount due on or before the due date. Paying off credit card debts, as much as possible, can increase your CIBIL score quickly qualifying you as a low credit risk.
4. Set Repayment Reminders for Your Credit Card
A regular repayment schedule can work wonders for your credit rating. Credit card users should always pay their credit dues on time. Delays in payments or pending dues may attract penalties that can cause a dip in your CIBIL score. Hence, set reminders for EMI payments so that you don’t miss out on any instalments.
5. Maintain Older Credit Cards
Past credit history that spans a longer period of time can strengthen your credit profile. So, retain old credit cards to build a sound credit history and raise your credit score, and pay your credit bills in full and on time.
6. Increase Your Credit Limit
Your credit utilisation ratio plays a significant part in supporting a good credit score. Restricting credit usage based on your allotted limit can increase your score. But once you overstep the limit, it has the opposite effect of reducing your credit score. This can be managed best by requesting your lender to customise the credit limit according to your expenses.
7. Check Your CIBIL Report for Errors
Sometimes, there could be mistakes, incorrect information, or a delay in updating details in your credit records, which may potentially bring down your credit score. Hence, check your CIBIL score periodically to identify possible errors and rectify them by submitting a CIBIL Dispute Resolution form online.
It is vital to maintain a good credit score even after you secure a loan. But if your credit score is already on the lower side, you can follow these practical tips to improve your CIBIL score.
Also Read: Important Things Might Go Wrong with Your CIBIL Report
The Dos and Don'ts of Credit Card Usage
Here are certain do’s and don’ts that you should be aware of in order to make the most of your credit card:
Do’s of Credit Card Usage
Pay Your Balance in Full: Always try to pay off your credit card balance in full each month to avoid accruing interest charges.
Set up Payment Reminders: Ensure timely payments by setting up reminders or automating payments to avoid late fees and potential credit score impacts.
Monitor Your Statements: Regularly review your credit card statements for unauthorised transactions or errors, promptly reporting any discrepancies to your card issuer.
Keep Credit Utilisation Low: Aim to use only 30% of your total credit limit to maintain a healthy credit score and demonstrate responsible borrowing behaviour.
Don’ts of Credit Card Usage
Don’t Miss Any of Your Payments: Avoid missing credit card payments as it can lead to late fees, penalty interest rates, and negatively impact your credit score.
Don't Overuse Your Credit: Avoid exhausting your credit limit. Keeping your credit utilisation ratio below 30% helps maintain a good credit score and shows responsible financial management.
Don’t Apply for Credit Cards if Not Required: Avoid applying for multiple credit cards if not required. It's important to assess your financial needs carefully and consider the implications of each card before applying, ensuring they align with your financial goals and ability to manage responsibly.
Summing Up
A credit score is important for loan approvals and interest rates. Scores range from 300 to 900, with higher scores indicating better creditworthiness. Managing credit cards wisely, like paying bills on time, and maintaining low balances can improve scores. Regularly monitoring and correcting errors in your credit report also helps maintain a healthy score.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Trending Articles

home+loan Home Loan
[N][T][T][N][T]
TDS on Sale of Property2025-04-02 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How to Apply for a Home Loan in India: A Complete Guide2025-04-02 | 4 min

home+loan Home Loan
[N][T][T][N][T]
A Practical Guide for First-Time Homebuyers Buying a New Home2025-04-02 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Upscale Living in Bengaluru: 7 Localities to Consider2025-04-02 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Processing Fees2025-04-02 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Square Feet to Gaj: A Quick Guide for Loan Against Property Applicants2025-04-02 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How to Claim a Stamp Duty Refund After Cancelling a Registered Sale Deed in Maharashtra2025-04-02 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Things to Avoid When Switching Your Home Loan2025-04-02 | 3 min

cibil Cibil
[N][T][T][N][T]
Different Types of Credit Report Errors and How to Fix Them_WC2023-07-11 | 4 min

cibil Cibil
[N][T][T][N][T]
How can I Remove Loan Inquiry from CIBIL Credit Report2024-01-22 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Exploring the Most Premium Localities in Noida: Top 10 Residential Neighbourhoods2025-04-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
TNREGINET Portal2025-04-02 | 3 min

[N][T][T][N][T]
Smart Ways to Pay Off Your Home Loan Faster2025-04-01 | 6 min

home+loan Home Loan
[N][T][T][N][T]
3 Smart Tips for Refinancing Your Home Loan2024-12-03 | 3 min

home+loan Home Loan
[N][T][T][N][T]
What is Patta Chitta and How to Apply for it Online?2025-04-01 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Why Should You Choose a Balance Transfer on Your Home Loan?2023-02-01 | 4 min

home+loan Home Loan
[N][T][T][N][T]
A Complete Guide on the Benefits of Joint Home Loan2022-11-16 | 5 min

tax Tax
[N][T][T][N][T]
Everything You Should Know About Tax Savings When Taking a Home Loan2023-01-09 | 5 min

home+loan Home Loan
[N][T][T][N][T]
PM Surya Ghar: Muft Bijli Yojana: Empowering Households with Rooftop Solar2025-04-01 | 3 min

tax Tax
[N][T][T][N][T]
Can I Claim Home Loan Tax Benefits on an Under-Construction Property?2024-05-23 | 5 min

tax Tax
[N][T][T][N][T]
How to Claim Tax Benefits on Joint Home Loans2024-07-10 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Viewing Jharkhand Land Records Online via JharBhoomi Portal2025-04-01 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding the Loan-to-Value (LTV) Ratio: Meaning, Formula and Importance2025-04-01 | 2 min

[N][T][T][N][T]
3 Ways to Reduce Your EMIs with a Home Loan Balance Transfer2024-05-08 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What is a Leave and Licence Agreement and Why is it Important?2025-04-01 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Easy Ways to Pick the Right Loan Against Property Tenor2024-05-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Know the Survey Number of Land in India2025-04-01 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Kaveri Online Services Portal for Property Registration in Karnataka2025-04-01 | 3 min

cibil Cibil
[N][T][T][N][T]
Importance of CIBIL Score for Achieving Business Goals2024-03-13 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Can You Buy a Home Without Paying the Down Payment First?2025-04-01 | 3 min

tax Tax
[N][T][T][N][T]
Tax Benefits on Home Loans for Self-Employed Individuals: What You Need to Know2024-06-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
What Is Home Loan Eligibility and How Is It Calculated2024-07-11 | 6 min

home+loan Home Loan
[N][T][T][N][T]
How Can NRIs Avail of Home Loans in India2025-03-17 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Why is the Interest Component Higher in the Initial EMIs of a Home Loan2025-03-07 | 6 min

home+loan Home Loan
[N][T][T][N][T]
How to Pay House Tax Online in Gorakhpur via Nagar Nigam Portal2025-03-28 | 4 min

cibil Cibil
[N][T][T][N][T]
What Is Credit Utilization Ratio and How Can You Improve It?2024-03-22 | 5 min

cibil Cibil
[N][T][T][N][T]
Pay Minimum Amount Due on Your Credit Cards Will Impact Your Credit Score2024-03-11 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Exploring Square Feet to Centimeter Conversion for Interior Design and Construction2025-03-27 | 2 min

cibil Cibil
[N][T][T][N][T]
Does CIBIL Score Affect Loan Against Property Eligibility?2023-02-15 | 7 min

cibil Cibil
[N][T][T][N][T]
What Does Your Credit Score Tell About You?2024-06-11 | 5 min

cibil Cibil
[N][T][T][N][T]
Importance of CIBIL Score & Tips To Improve It2023-02-21 | 5 min

cibil Cibil
[N][T][T][N][T]
A Helpful Guide to Understanding Your Credit Report2024-01-26 | 5 min

cibil Cibil
[N][T][T][N][T]
How Many Credit Inquiries are Too Much in a Year2023-09-21 | 2 min

cibil Cibil
[N][T][T][N][T]
Five Reasons Why a Bad Credit Score Could Lead to Loan Rejection2024-01-22 | 5 min

tax Tax
[N][T][T][N][T]
Difference Between Old vs. New Tax Regime2024-08-22 | 5 min

cibil Cibil
[N][T][T][N][T]
How Does Being A Loan Guarantor Affect Your Credit Score?2024-03-13 | 4 min

cibil Cibil
[N][T][T][N][T]
How a Good CIBIL Score Can Help You Celebrate the Festive Season Better2024-03-19 | 5 min

cibil Cibil
[N][T][T][N][T]
Here’s How a Short-term Loan Can Help You Improve Your CIBIL Score2024-03-25 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Agricultural Land: Unlock the Value of Your Property2025-03-07 | 6 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Residential Property: A Smart Financing Solution2025-03-10 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Property Mortgage Loan: A Smart Financing Option for Businesses2025-03-10 | 3 min

tax Tax
[N][T][T][N][T]
5 Tax Savings and Other Advantages You Can Get When You Apply for Home Loans2024-02-14 | 6 min

tax Tax
[N][T][T][N][T]
Income Tax Structure in New Regime: New Tax Exemption Limit 20252024-05-08 | 4 min

tax Tax
[N][T][T][N][T]
10 Useful Income Tax Deductions for FY 2022-232024-02-21 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Complete Guide to Securing a Attractive Interest on Home Loans2024-01-23 | 3 min

home+loan Home Loan
[N][T][T][N][T]
What Affects the Interest Rate on Your Home Loan2024-03-13 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Differences Between Fixed and Floating Interest Rates2024-05-15 | 2 min

[N][T][T][N][T]
Home Loan Overdraft Facility: Features and Benefits2025-03-19 | 3 min

[N][T][T][N][T]
Checklist of Documents Required for Home Loan2024-02-07 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What are AMC Charges?2025-03-21 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How to Change Your Home Loan E-Mandate on the BHFL Customer Portal2025-03-21 | 3 min

home+loan Home Loan
[N][T][T][N][T]
BBMP: Full Form, History, and Role in Bangalore’s Governance2025-03-20 | 2 min

[N][T][T][N][T]
Mutation of Property: Meaning, Process, and Importance2025-03-20 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Floor Space Index (FSI): Meaning, Calculation, and its Importance in Real Estate2025-03-20 | 2 min

cibil Cibil
[N][T][T][N][T]
How to Increase Your CIBIL Score Above 800: 7 Proven Methods2023-01-24 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Ways to Check RERA Registration Status of Real Estate Projects2025-03-20 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Meebhoomi: A Comprehensive Guide to Andhra Pradesh Land Records2025-03-20 | 3 min

home+loan Home Loan
[N][T][T][N][T]
What is Margin Money in Home Loans? Everything You Need to Know2025-03-20 | 3 min

home+loan Home Loan
[N][T][T][N][T]
IGR Odisha: A Guide to Online Property Services and Registration2025-03-20 | 3 min

[N][T][T][N][T]
Relinquishment Deed: Meaning, Format, and Documents Required2025-03-19 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Essential Tips for First-Time Homebuyers in India2025-03-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Buying a Home: Understanding the 'No EMI till Possession' Scheme2025-03-19 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Everything You Need to Know About a Co-Applicant in a Home Loan and Tax Benefits2025-03-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
What is the Ideal Age to Buy a House?2025-03-19 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Documents Required for Salaried Persons: A Complete Guide2025-03-19 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How Your Bank Account Statement Affects Your Home Loan Eligibility2025-03-19 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Rs.70,000 Salary: How Much Can You Borrow?2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loans for Salaried Employees: Eligibility, Documents, and Application Process2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Self-Employed: Three Steps to Improve Your Approval Chances2025-03-12 | 5 min

[N][T][T][N][T]
NRI vs. Indian Resident Home Loans2025-03-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Home Construction Loan Application Guide2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Apply for a Home Loan with a Low Salary2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Property Valuation for Home Loans in India2025-03-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How to Check Your CIBIL Score Online for Free and Improve Your CIBIL Score2025-03-17 | 5 min

[N][T][T][N][T]
Top Cities in India to Buy a Home2025-03-14 | 3 min

[N][T][T][N][T]
What are Tranche Disbursement and Tranche EMI in Home Loans?2025-03-14 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Himbhoomi: A Comprehensive Guide to HP Land Records2025-03-13 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Settlement: What You Need to Know2025-03-13 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding GWMC Property Tax: Payment Methods, Calculation, and Benefits2025-03-13 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Guide to Form 26QB: Download, Fill, and File TDS on Property Sale2025-03-13 | 3 min

[N][T][T][N][T]
Home Loan for Pensioners: Eligibility and Benefits2025-03-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Franking vs. Stamping: Meaning, Differences, and Benefits2025-03-12 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the Roles of Co-borrower, Co-signer, and Co-owner in Home Loans2025-03-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding ECS in Banking: Full Form, Benefits, and Working Process2025-03-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Top 5 Home Loan Benefits for First-time Woman Buyers2024-05-14 | 5 min

[N][T][T][N][T]
AnyROR Gujarat and the e-Dhara Land Record Systems2025-02-26 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Commencement Certificate: Meaning, Role, Requirement and Importance2025-03-06 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Conveyance Deed: Meaning, Types, Purpose, and Key Differences2025-03-06 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Simplified Conversion: From Square Inches to Square Feet2025-03-06 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Calculate Your Home Loan Eligibility2025-03-05 | 3 min

home+loan Home Loan
[N][T][T][N][T]
House Rent Allowance Under Section 10(13A) of the Income Tax Act2025-03-05 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
How to Apply for a Mortgage Loan?2025-03-05 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Top Up your Home Loan2025-03-04 | 3 min

home+loan Home Loan
[N][T][T][N][T]
BanglarBhumi West Bengal Land Records2025-03-04 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Know About CTS Number When Buying a Property in Mumbai2025-03-04 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Self-Employed Individuals2025-03-03 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Tips to Secure Quick Home Loan Approval2025-03-03 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenor that Suits Your Budget2023-06-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Monthly Reducing Balance Method for Home Loan Interest2025-02-25 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding RERA in Real Estate: Meaning, Full Form, and Benefits2025-02-16 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Token Money: Its Importance and Key Considerations2025-01-16 | 2 min

home+loan Home Loan
[N][T][T][N][T]
A Detailed Overview of ‘A Khata’, ‘B Khata’ Certificates: Meaning, Differences, & Conversion Process