From 300 to 800: How can you improve credit score in one year?

Did you check your credit score recently to realise that your credit score is abysmally low or lower than your expectations? The common reasons for a low credit score could be missed EMI or credit card payments, defaulting on loans, high credit utilisation ratio and multiple loan applications (hard inquiries).

It is quite vital to check the CIBIL score on a regular basis. Therefore, it is vital to take a series of steps over the entire year to push your credit score upward.

Months 1 to 2: Detailed report

A. First you need to obtain a detailed credit report and analyse it.

B. Now you need to identify any errors (such as incorrect loan details, wrong personal information).

C. You can also file disputes with the credit bureau to correct the mistakes, if any.

Months 3 to 4: Clear outstanding dues

A. You need to negotiate with banks/lenders to clear old dues.

B. You can set up auto-pay for all future EMI and credit card bills.

C. Prioritise high-interest debt to reduce financial burden.

Month 5 to 6: Lowering Credit Utilisation

A. You need to maintain credit card usage below 30 per cent of the limit.

B. You can use multiple credit cards wisely to distribute spending.

C. You need to avoid unnecessary new loans to reduce hard inquiries.

Months 7 to 9: Building positive credit history

A. You may apply for a secured credit card (linked to a fixed deposit) to start positive credit history.

B. You can take a small personal loan and repaying it on time.

C. You can become an authorised user on a responsible family member’s credit card to improve credit mix.

Months 10 to 12: Monitoring and staying disciplined

A. You need to regularly check the CIBIL score to track progress.

B. You can avoid unnecessary credit applications.

C. You can set a financial routine to ensure on-time payments.

The Results 

When the score crossed 800, you may share it with financial institutions to see what it can enable you such as easy approval for a home loan or credit card with better rewards. The impact on financial confidence and security.

What are the lessons learned?

It is recommended never to ignore credit health, even if you don’t need a loan now. There is a great importance of financial discipline in maintaining a high credit score. You need expert insights on best practices for a strong credit profile.