Your credit score is the first thing a lender looks at and the only part of your application you can improve before you apply. It runs from 300 to 900. Above 750 you are offered the lender's best pricing; between 700 and 750 you will still find lenders at a slightly higher rate; below 700 the list of who will consider you gets short.
What the score is actually measuring
| Factor | Roughly how much it counts | What it means |
|---|---|---|
| Payment history | About a third | Have you paid on time, every time |
| Credit utilisation | About a third | How much of your available limit you use |
| Age of credit | Smaller | How long you have had accounts open |
| Credit mix | Smaller | A blend of secured and unsecured borrowing |
| Recent enquiries | Smaller | How many lenders have checked you lately |
Six things that work
1. Never miss a payment — this is most of the score
One missed credit card payment can cost more points than months of good behaviour earn back. Put every EMI and card bill on auto-debit. If money is tight, pay the minimum on time rather than the full amount late — the score cares about the date far more than the amount.
2. Keep card usage under 30% of your limit
Spending ₹90,000 on a ₹1,00,000 limit reads as financial stress even if you clear it in full every month, because the balance is reported on the statement date. Pay part of the bill before the statement generates, or ask for a limit increase and do not spend it.
3. Do not close your oldest credit card
Closing it shortens your credit history and cuts your total available limit, which pushes your utilisation up. Both hurt. Keep it open, use it occasionally for something small, and pay it off.
4. Stop applying for things
Every formal application creates a hard enquiry on your report. Several in a short window reads as desperation. This is a good reason to have a broker place your file once with the right lender, rather than applying to five banks yourself and collecting five enquiries.
5. Check your report and dispute errors
Errors are common: a loan you closed still showing open, an account that is not yours, a payment marked late that was not. You are entitled to a free credit report each year from each bureau. Raising a dispute is free and corrections typically land within 30 days — the cheapest points available to anyone.
6. Never let a loan be marked 'settled'
How long does it take?
- Correcting a reporting error: two to four weeks once the dispute is raised.
- Bringing utilisation down: one to two statement cycles.
- Recovering from a missed payment: three to six months of clean history.
- Recovering from a default or settlement: years, not months.
The practical answer is that if you plan to buy a house this year, start on your score now. Six months of deliberate effort is usually the difference between the best rate available and a rate you will resent for two decades.
Not sure where you stand? We will tell you honestly whether to apply now or wait three months.
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