5 Do's and Don'ts to Improve Your Credit Score


  • Taking care of one’s credit score and keeping it in good shape is a sound financial habit
  • It helps prospective lenders assess an applicant’s financial health and creditworthiness when they apply for an instant personal loan

What are the Factors That Help Calculate Your Credit Score?

  • Several factors are considered that helps calculate the numerical value known as the credit score
  • These factors are:
  1. Your history of repayments, late payments, and defaults on loans and/or credit cards
  2. Your current credit utilization ratio
  3. Number and frequency of hard inquiries towards acquiring more credit recently
  4. The age of your credit
  5. The types of credit you have in possession

What is a Good Credit Score?

  • The pathway to new opportunities opens up when you have a positive credit score
  • The 3 digit number ranging between 300 and 900 is your credit score on the credit report
  • A score between 700 and 749 is good. One must have a minimum score of 700 to be eligible for mortgage loans from most lenders.  
  • A score over 750 is perceived to be excellent and is required by most lenders like Fullerton India to consider an applicant for a personal loan application. 
  • If one has no history of credit transactions, then their credit score is “NH” or “-1”. Such candidates can apply for a personal loan from Fullerton India, providing they meet all the other required eligibility criteria.

How Can You Improve Your Credit Score in India?

  1. Set reminders for paying your bills on time and ensure that you deal with any delinquencies
  2. Always pay your EMIs and credit card bills in full.
  3. Target a 30% or less credit utilization and minimize new credit requests before paying off existing ones
  4. Maintain old credit cards to lengthen credit history 
  5. Opt for long tenure loans
  6. Do your research and apply with not more than 2 reputed lenders whose eligibility criteria match your profile. 
  7. Checking your credit score and report at least once a year and after paying off a loan helps you spot credit fraud
  • Let’s take a look at 5 don’ts that can bring your positive credit score on a downhill run
  1. Avoid missing payments towards your existing financial obligations within any given payment cycle
  2. Avoid paying only the minimum amount due on EMIs and credit card bills, as it will cause accrual of interest on the remaining amount, thereby increasing your debt and lowering your score.
  3. Do not go over a 30% credit utilization ratio threshold as it hampers your chances of future credit and preferential personal loan interest rate
  4. Keep your old credit cards active as that tends to shorten your credit history and age
  5. Diversify your credit lines as that limits the perspective of prospective lenders
  6. Do not apply with multiple lenders when you need a loan, as multiple hard inquiries may lower your credit score. 
  7. Do not overlook errors in your credit report as inaccurate reporting can have a negative impact on your credit score

Final Takeaways

  • Your credit score is possibly one of the core contributors if you are seeking unsecured credit such as an instant personal loan
  • Use our personal loan eligibility calculator to get an estimate of the loan amount you can apply for based on a few basic parameters. 
  • Use our personal loan EMI calculator to estimate the EMI from your loan, and then select a suitable repayment tenure. 


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