Why Your CIBIL Score Matters A CIBIL score is a 3-digit number that summarizes your credit history. Lenders use it to assess your creditworthiness. A higher score means you are a lower-risk borrower. Here's how to improve it.

1. Pay Your Bills on Time, Every Time This is the most important factor. Late payments negatively impact your score. Set up auto-debit for your EMIs and credit card bills.

2. Keep Your Credit Utilization Ratio Low Don't max out your credit cards. Try to use only up to 30% of your available credit limit. A high utilization suggests you are too dependent on credit.

3. Don't Close Old Credit Cards Older credit accounts with a good payment history add value to your score. Closing them can shorten your credit history.

4. Review Your Credit Report Regularly Check your credit report for errors or inaccuracies. You can get a free report annually from CIBIL. Dispute any errors immediately.

5. Avoid Multiple Loan Applications at Once Every time you apply for a loan or credit card, the lender makes a "hard inquiry" on your report, which can temporarily lower your score. Only apply when you truly need credit.

6. Maintain a Healthy Mix of Credit Lenders like to see that you can manage different types of credit, like a mix of secured loans (home loan) and unsecured loans (personal loan, credit card).

Key Takeaway Building a good credit score is a marathon, not a sprint. Consistent, disciplined financial habits are the key to a healthy score.