How to improve Credit Score if CIBIL is below 650?

Last Updated : Feb. 19, 2025, 4:12 p.m.

A credit score below 650 is usually considered “low” or “fair,” depending on the scoring model. These borrowers pose a higher risk to lenders, making it difficult for them to qualify for any loans or credit cards. Even if they are sanctioned loans, they will have to face unfavorable loan terms and higher interest rates. Their financial history is marked by payment defaults or high utilization of credit. So, it is essential to improve the credit score from 650 to 750 or above. So, how to do this? Read on to find out smart tips to improve your credit score.

Smart Ways to Improve Your Credit Score

Repay on Time

Repayment of dues is a parameter that has a high impact on your credit score. If your repayment history is not good, your credit score will be low. The repayment history makes up to 35% of your credit score. So, ensure to make timely repayments of your loan EMIs and credit card bills. Pay off the entire amount due for each bill or EMI. Avoid paying only the minimum amount due or only part of the EMI, since interest is charged on the balance carried forward. This will lead to accumulation of outstanding balance, and it will affect your credit score negatively. On the other hand, making timely repayments helps in improving your score considerably.

Keep your Credit Utilization Ratio Low

The credit utilization ratio (CUR) is defined as the percentage of credit you utilize out of the credit limit offered by the lender. This credit utilization ratio must not exceed 30%. The lower your CUR, the higher is your credit score.

Keep Old Credit Cards Open

Having a lengthy credit history is beneficial for your credit score. It gives credit bureaus enough information to compute your credit score. So, keep old credit cards that you no longer use open. When you close old credit cards, the length of your credit history decreases. The total available credit limit reduces, and hence your CUR increases. So, keeping old credit cards with good credit history opens helps in improving your credit score.

Check your Credit Report Often

It is good to check your credit report periodically every few months to ensure it is up to date and accurate. There could be errors in the report which is the reason for the low score. If there are any discrepancies, then raise a dispute with the credit bureau. Once you correct the error, you can see an improvement in your credit score.

Avoid Applying for Multiple Loans

Multiple loans imply that you will have to pay multiple EMIs. This may put the borrower into a financial burden. It also shows you as a person who is always over-dependant on credit and as financially irresponsible. Further, for every new credit application, a hard inquiry is conducted on your credit report to evaluate your creditworthiness. These hard inquiries will cause your credit score to drop.

Balancing Secured & Unsecured Loans

Have a healthy credit mix in such a way that there is a balance between secured loans and unsecured loans with differing tenures. It will give you space while paying off your EMIs. This will show up in your credit report and improve your credit score as well.

Maintain a Good Credit History

Maintaining a good credit history will lead to a higher credit score. You can also get preferential interest rates and better loan terms. If there are no errors on your credit report, you can work on improving your credit score and slowly delete the negative remarks. However, it will take some years for the negative remarks to go away from your report.

Free CIBIL Score Check

I have never checked my CIBIL in my entire life maybe because there was no need. I researched properly and got to know that checking the score is easy and available for free. Wishfin is one such platform where I checked my score. You can also check your CIBIL score for free . Below are the steps you need to follow.

How Can You check CIBIL score at Wishfin?

Wishfin is the first official fintech partner of CIBIL. Below are the steps in order to check your score online:

• Visit the CIBIL score check page at Wishfin.
• Provide your full name as mentioned on the PAN card
• Enter your Date of Birth
• Choose the gender you belong to
• Mention your PAN card number
• Enter your contact address
• Provide the email ID fn which you want to get the credit report
• Enter your mobile number
• Submit the form

On the successful submission of the CIBIL score form, you will get a confirmation on your email ID. You will get the detailed credit report on the email ID you have provided.

How Can I Improve my CIBIL Score?

Here are some of the best options to improve CIBIL or credit score .

• Pay your loan EMIs or credit card bills on time.
• You can apply for a loan or a credit card
• Avoid unnecessary usage of credit cards.
• Try to maintain more than 30% of your credit card limit.
• Increase your limit in case you are sure of using it in a disciplined manner.

Why is my CIBIL score less than 650?

There are certain basic but important factors that affect the credit score of an individual. Below are some of the main reasons behind your lower credit score.

• Missed EMI payments
• Spending more than 30% of your credit card limit, it is affecting the score.
• Using credit cards for almost every expenses.
• Late EMIs or credit card bill payments.

To get best credit cards and low-interest loans, your CIBIL score or credit score should be good. In India, lenders such as banks and NBFCs would consider your application suitable for the credit facility only if you have a good credit score. It is also true that most of the people do not have a credit history and still avail the service but the fact is that they are not eligible for the best deals.