How to Increase CIBIL Score from 500 to 750

A credit score of 500 is considered "Poor" by all four credit bureaus CIBIL, CRIF High Mark, Experian, and Equifax. This score typically indicates a history of defaults, missed payments, high-risk credit behavior or even no credit history. To lenders, this is a red flag, which can result in: 

So, understanding the reasons for low CIBIL Score is the first step towards recovery followed by employing targeted corrective measures

Since bureaus update records every 30-45 days, you won't hit 750 overnight.

Building credit is a marathon, not a sprint. Since lenders report data to bureaus every 30 to 45 days, it takes time for your positive actions to reflect.

Building your credit score requires a strategic approach. Implement these CIBIL score improvement tips to increase your CIBIL score from 500 to 750:

1. Build Score with a Secured Credit Card

If you are relatively new to credit or your score is stuck at 500 or below, unsecured cards are often out of reach. A secured credit card against fixed deposit (FD) is the most efficient bridge to a better score.

The Strategy: Use an FD-backed credit card for small, manageable purchases and pay the full balance amount monthly by the due date. This can help demonstrate financial discipline to the credit bureaus, thus building positive credit history and profile.

2. Prioritise Punctual Repayments

One of the most significant reasons for low CIBIL Score is usually an inconsistent payment behavior. Since your repayment history carries major weightage in determining your credit score, even a single missed deadline can derail months of progress.

The Strategy: Use automated payment tools or digital alerts to ensure every credit card bill and loan EMI is cleared on or before the due date.

3. Restrict High-Frequency Hard Enquiries

Every time you formally apply for a new credit line, lenders perform a hard enquiry, which temporarily lowers your score. Repeatedly applying for loans or credit cards within a short time window signals a heavy reliance on debt portraying you as credit hungry.

The Strategy: Apply for a new credit product only when essential. Instead of sending multiple applications at the same time, analyse your spends and credit needs as well as check your credit score for free on Paisabazaar to gauge your eligibility first.

4. Maintain a Long and Healthy Credit History

The age of your credit footprint signals your experience in handling credit. Older credit accounts provide the historical data necessary to prove long-term stability and responsible credit behaviour.

The Strategy: Avoid the common mistake of closing old credit cards simply because they are unused. Keeping these accounts active maintains your average credit age and supports a higher CIBIL Score.

5. Build a Diversified Credit Mix

Managing a diverse credit portfolio suggests that you are capable of handling different financial responsibilities. A healthy mix includes both revolving credit, like credit cards, and installment-based debt, like loans.

The Strategy: Over time, aim for a balance between secured loans, like a Loan Against Property or FD-backed credit card, and unsecured options to prove your versatility as a borrower to the lenders.

6. Oversee Joint Liabilities

If you are a guarantor or co-applicant for any loan, your financial reputation also starts getting affected as per the other person's behaviour. If the primary borrower fails to make timely payments, the default will also appear on your credit as if it were your own.

The Strategy: Treat co-signed credit accounts with the same scrutiny as your personal ones. Regular monitoring is required to ensure these external factors don't decrease your CIBIL Score to 500or below.

7. Regulate the Credit Utilisation Ratio

If you use your available credit excessively and often max out the credit limit, this can make you appear "credit hungry" as well as make you struggle to repay the due amount on time. Both the cases can negatively affect your CIBIL Score.

The Strategy: Adjust your spending to keep your credit utilisation ratio (CUR) within your pre-set monthly budget without maxing out the whole credit limit. This shows you have good debt usage and management skills.

8. Regularly Review Your Credit Report

Administrative errors and other inaccuracies in your credit report can unfairly affect your credit score. These mistakes might be about your personal details, your ‘Days Past Due’ or account statuses, etc.

The Strategy: Regularly track and review the information and credit details in your report to fin any mistake early. Dispute the errors promptly to ensure your CIBIL Score reflects your actual credit behaviour. is a true reflection of your actual repayment behavior.

9. Optimise Your Debt-to-Income Ratio

While maintaining a debt repayment schedule is important, early repayments reduce your overall liability and show the bureaus that you are aggressively managing your debt load.

The Strategy: If your cash flow allows, pay off smaller existing loans and outstanding debts faster to lower your credit utilisation capacity and improve your CIBIL Score.

10. Opt for Credit Advisory Services

If you are struggling to repair your credit score then you can opt for credit advisory services which offer specialised guidance on such issues and help you build a stronger credit profile with a high CIBIL Score.

The Strategy: Utilise Paisabazaar credit improvement services called Credit Health Pro to receive a data-backed, personalised plan that targets the specific issues holding back your credit score.

Suggested Read: 6 Simple Ways to Increase Your Credit Score

Avoid these mistakes that can hamper your credit building efforts and keep your CIBIL Score low:

• Delayed Payments and Missed EMIs: Missing due dates signals irresponsible credit behaviour and accounts for the largest portion of your credit score's decline.
• Paying Only the ‘Minimum Amount Due’: This helps you avoid late fees, but triggers a high-interest debt spiral which can be difficult to repay once the dues start piling up.
• Simultaneous Credit Applications: Applying for multiple credit products at once triggers hard enquiries that portray you as credit hungry to the lenders.
• Excessive Credit Utilisation: Spending beyond your usual capacity and budget indicates excessive credit usage which can also put financial strain.
• Closing Old Credit Accounts: Terminating an old credit card can shorten your credit history length and increase your credit utilization ratio (CUR).
• Ignoring Credit Report Errors: Not reviewing your credit report and delay in reporting any errors can prevent your CIBIL score from reflecting your actual repayment behaviour.

Generally, it may be difficult to get an unsecured loan with a CIBIL Score of 500. Moreover, even if you get approval for such a loan, it is likely to come at a high rate of interest, limited loan amount and overall unfavourable terms.

However, you can still qualify for secured loans like Loan Against Property or a Gold Loan. These are issued against collateral which reduces the lender's risk.

A high CIBIL Score of 750 and above comes with the following benefits:

Having a strong credit profile with a high score also indicates a higher lender’s trust in you which further makes the process of getting access to a new credit line at better terms much smoother.