Best Proven Steps To Improve Your Credit Score In 2023

Your credit score is a significant factor that lenders consider when you apply for a loan. A good credit score is key to securing better personal loan interest rates, getting approved for credit, and unlocking opportunities for financial growth. 

Whether you’re looking to improve your credit score to apply for a loan or to simply enhance your financial standing, here are some steps to take in 2023.

Understand What Makes up Your Credit Score 

Before you start improving your credit score, it’s essential to understand what comprises it. Here are the components of your credit score:

  • Payment History: Timely payment of credit card bills and loan EMIs contribute significantly to your credit score.
  • Credit Utilisation Ratio: This is the proportion of your credit limit you’re using. It’s recommended to keep this below 30%.
  • Credit History Length: A longer credit history can boost your credit score.
  • Credit Mix: A mix of different types of credit like loans and credit cards can improve your score.
  • New Credit: Frequent applications for new credit can hurt your score as it’s seen as credit-hungry behaviour.

Surefire Ways to Improve Your Credit Score

  • Consistently Pay Your Bills On Time 

Your payment history is a significant contributor to your credit score. Paying your bills on time every month can positively impact your credit score. 

  • Reduce Your Credit Utilisation Ratio

High credit utilisation can negatively impact your credit score. Try to maintain a balance of not more than 30% of your total credit limit across all your credit cards. You can achieve this by either reducing your credit card expenses or increasing your credit limit.

  • Maintain a Healthy Credit Mix

Having a mix of secured (like home and auto loans) and unsecured loans (like credit cards and personal loans) can improve your credit score. However, it’s crucial not to borrow more than what you can repay.

  • Don’t Apply for Credit Too Frequently

Each time you apply for credit, lenders pull up your credit report, causing a hard enquiry. Too many hard enquiries in a short span can bring down your credit score.

  • Monitor Your Credit Report Regularly

Regularly monitoring your credit report can help you spot any inaccuracies or discrepancies that may harm your credit score. If you find any, report them immediately to the respective credit bureau for rectification.

  • Avoid Closing Old Credit Cards

Unless your old credit cards carry high annual fees or you’re unable to manage them, avoid closing them. A longer credit history helps improve cibil score. Moreover, closing a credit card decreases your total available credit limit, which might increase your credit utilisation ratio.

  • Pay off Outstanding Debts

If you have any outstanding debts, first place your focus on paying them off. Clearing off debts can lower your credit utilisation ratio, thus helping you improve your credit score.

  • Build a Credit History

If you don’t have a credit history, start building one. You could consider applying for a credit card or a small loan. However, remember that the key to a good credit score is to borrow only what you can afford to repay and to make all payments on time.

Improving your credit score can’t happen overnight. It requires consistent effort and good financial habits. However, a good credit score is crucial if you’re considering your credit score to get a personal loan. Lenders consider applicants with high credit scores as low-risk borrowers, making it easier to secure a loan with favourable terms.

  • Refrain From Credit Settlements

A credit settlement can adversely affect your credit score as it indicates that you have failed to repay your debt in full. Creditors often report settled accounts as “Settled” or “Paid Settled” to the credit bureaus, which can be a red flag for future lenders and can hinder your ability to secure a loan in the future.


With these steps in mind, you can work towards improving your credit score in 2023 and beyond. Keep in mind that financial discipline is the key to maintaining a high credit score. 

Make sure you spend responsibly, repay your debts on time, and monitor your credit history regularly to achieve a good credit score to get a loan or any other form of credit. 

With these good financial habits, you will not only be able to improve your CIBIL score but also secure a healthier financial future.

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