Banks check your credit score (CIBIL etc.) before lending — a number between 300 and 900 reflecting your creditworthiness. 750+ is generally considered good.
What moves the score
- On-time EMI/bill payments — the biggest factor
- Credit utilisation — under 30% of card limit is better
- Frequent loan applications (hard inquiries) pull it down
- Closing old cards shortens credit history
Checking it free
Every bureau offers one free report a year — use official bureau sites like cibil.com. Found a wrong entry? File a dispute on the bureau portal.
Five steps to improve
- Auto-pay every EMI/card bill on the due date
- Keep card usage under 30% of the limit
- Pay in full rather than "settling" — the Settled tag haunts for years
- Do not apply for loans at many places at once
- Improvement takes 6–12 months — be patient
