Credit Score Guide for India

How long does it take to improve a low score?

With clean behavior—paying before due dates, keeping utilization under 30%, and avoiding fresh delinquencies—visible improvement can begin within 3–6 months. Larger jumps may need 9–12 months of consistent payments. Rectify bureau errors quickly by raising disputes and providing proofs. Thin files (limited history) benefit from a secured credit card or small-line products to build track record.

Does closing credit cards hurt?

Closing your oldest card can lower the average age of accounts and slightly reduce score temporarily. It may also increase utilization on remaining lines. If the card is costly, consider downgrading to a no-fee variant instead. Redeem rewards before closure, clear pending EMIs, and get written confirmation from the issuer. Avoid closing multiple cards in the same quarter unless necessary.

What is utilization and why does it matter?

Utilization is the ratio of used credit to total available limits. High utilization signals potential stress and can lower scores even if payments are on time. Spread spending across cards to keep each under 30% and use statement-date reminders to pay early. If you consistently approach limits, request a prudent limit enhancement backed by income proof to improve utilization without overspending.

How do hard inquiries affect score?

Each application for new credit typically triggers a hard inquiry that can nudge the score down for a short period. Multiple inquiries within weeks suggest elevated risk. Space out applications and accept pre-approved offers when truly needed. If a lender runs multiple pulls erroneously, request consolidation or removal with documentation.

Can loan settlements or write-offs be fixed?

Settled or written-off accounts are serious negatives and can persist on reports for years. If possible, convert settlements to full closure by paying remaining principal or negotiated amounts and obtain a “closed” status letter. After resolution, rebuild with perfect payment history and low utilization; improvements will be gradual but meaningful.

What if there’s an error in my report?

Obtain reports from bureaus and check for incorrect personal details, accounts, limits or late-payment flags. File disputes through bureau portals with bank statements, NOCs or closure letters. Track resolution timelines; if an issuer delays, escalate with formal emails and helplines. Keep records; accurate data is the foundation of a healthy score.

Does mix of credit matter?

A balanced profile contains both revolving credit (cards) and installment loans (EMIs) handled responsibly. New-to-credit users can start with a low-limit card or secured card. Avoid opening multiple lines at once; slow, consistent management builds credibility.

How to handle an EMI bounce?

Pay immediately, including bounce charges, and ensure sufficient balance before the next cycle. Ask your lender about changing the mandate date closer to salary credit. One bounce is manageable; repeated bounces indicate cash flow issues—rework your budget and avoid further applications until stability returns.

Should I accept every limit increase?

Limit increases can help utilization, but only accept if you can manage spending discipline. Review notifications and confirm they are not temporary promotional boosts. Set app-based controls and transaction alerts to maintain safety.

Any quick routine to keep scores strong?

Auto-pay total amounts due, pay EMIs early, keep utilization low, avoid clusters of new applications, and review statements monthly. Maintain updated KYC and contact details with issuers to avoid communication gaps. This steady routine builds resilience and keeps your profile attractive for future loans and cards.