Yes. **CIBIL score can be improved**, but it usually takes time because the score reflects your credit behaviour over a period of time.
### 10 practical ways to improve your CIBIL score
1. **Pay every EMI and credit-card bill on time**
* This is the most important factor.
* Avoid even a small overdue amount.
2. **Keep credit-card utilisation low**
* Ideally keep utilisation **below 30%** of your total limit.
* Example: If your limit is ₹1,00,000, try to keep monthly outstanding below ₹30,000.
* Lower utilisation can be even better.
3. **Don't apply for too many loans at once**
* Every formal loan/credit application can create a credit enquiry.
* Multiple enquiries within a short period can make you appear credit-hungry.
4. **Don't close your oldest credit card unnecessarily**
* A long, well-maintained credit history can help your profile.
* However, don't keep a card merely for credit history if its cost is unreasonable.
5. **Maintain a healthy mix of credit**
* A reasonable combination of secured and unsecured credit can be positive.
* Don't take a loan **just to create a credit mix**.
6. **Clear overdue amounts**
* If there are current overdue payments, clearing them is important.
* But remember: **paying an overdue amount doesn't necessarily erase the historical record immediately.**
7. **Check your CIBIL report for errors**
Look for:
* Loans that aren't yours
* Incorrect overdue amounts
* Wrong repayment status
* Duplicate accounts
* Incorrect personal details
* Accounts shown as "settled" when they were actually fully paid
If you find an error, raise a dispute with the credit bureau/lender.
8. **Avoid "settling" loans if you can fully repay**
* A lender-reported **"settled"** status can be viewed negatively by future lenders.
* Ideally, repay the full outstanding amount and obtain proper closure/NOC where applicable.
9. **Don't frequently transfer balances or take loans just to repay other loans**
* Debt restructuring or repeated borrowing can indicate financial stress to lenders.
10. **Give it time**
* CIBIL doesn't improve overnight.
* Consistently good repayment behaviour over several months can gradually strengthen your profile.
### For a person planning a business loan
I would follow this **6-month preparation strategy**:
**Month 1:** Check CIBIL report → identify errors/overdues
**Month 1–2:** Clear genuine overdue amounts
**Month 2–6:** Pay all EMIs on time
**Every month:** Keep credit-card utilisation low
**During this period:** Avoid unnecessary loan/credit-card applications
**Before loan application:** Check CIBIL + ITR + GST + bank statements + existing EMI obligations
**Important:** Don't take a new loan simply because someone says it will increase your CIBIL score. **Responsible use of existing credit is generally much more important than having more loans.**
Dec 02, 2025
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