Banks and financial institutions now almost entirely rely on CIBIL scores to determine whether or not to give people loans or credit cards. Applicants with a poor credit history, or even no credit history at all, have a slim probability of being approved for credit.

Fundamental ways of improving your Credit Score if you have a credit card are as follows:

  • Make purchases with cash rather than credit:

The majority of people use credit cards to make substantial purchases with the intention of paying them off over time. While this may appear to be a viable choice, if repayments are not completed on time, it might have a negative impact on your CIBIL score. For example, if you make significant purchases with your credit card combined with multiple smaller miscellaneous purchases, you may not realise the debt you incur over some time.

By the time you realize this, you may face a lot of trouble paying off the debts if your income is not high enough. The only option left in such situations is applying for a loan, however, even acquiring a loan at this stage will prove to be a humongous task considering your poor credit history. Keeping this in mind, it’s always a good idea to budget carefully and make purchases with cash whenever feasible to avoid being burdened by a maxed-out credit card. This can help you develop a credit history of good money management and reduce your card usage to a minimum.

  • Pay your bills with your credit card on a regular basis:

Using your credit card to pay your internet, phone, or utility bills, such as water and electricity, on a regular basis might help you establish a positive credit history and enhance your CIBIL score. The debt incurred on your credit card can be paid off quickly or within a short period of time because these charges are typically significantly lower than material products.

  • Make it a practice to pay back your debts:

Even if you are unable to pay off the entire debt on your credit card at one go, you should make the minimum payments before the deadline. This will prove to lenders that you are not habitually late in your payments and can be a positive credit risk in the long term. Paying off your credit card debt as quickly as possible also significantly improves your CIBIL score in a short span of time.

Although easier said than done, it only takes a little discipline and a good sense of credit card management to maintain a healthy financial situation. For more information about how to improve your credit score, you may contact our experts.


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