Struggling with bad credit score? Here’s how to go from 480 to 750 | Mint

In India a credible and strong credit score is crucial for securing personal loans, credit cards, favourable interest rates etc. Given a score of 480 is considered poor, still achieving a score of 750 or higher is still attainable with disciplined and calm financial habits.

According to Bhargav Errangi, Founder, POP, “Improving a credit score from 480 to 750 takes time and consistent effort. Start by paying every bill by its due date and lowering your credit card balances. Limit new credit applications and review your credit report for mistakes to correct.”

He further added, “Keeping older accounts active helps build a longer credit history. Using tools like secured credit cards or small installment loans can aid in rebuilding. Throughout the process, you’ll gain valuable lessons in money management, patience, and smart financial planning. Stay focused and track your progress regularly to stay motivated and on course.”

Importance of a good credit score

A credit score generally falls between the range of 300 to 900. It is a number that reflects an individual’s creditworthiness, repayment integrity and financial sincerity. Lenders often prefer and are comfortable with applicants that have credit scores of 700 or higher.

As this number demonstrates responsible credit behaviour. A higher loan can result in quicker loan approvals, smooth approval of credit card applications along with reasonable credit terms. 

Here are simple steps through which loan applicants and credit card holders can boost their credit scores from 480 to 750:

Steps to improve your credit score

1. Timely repayment of dues

Paying your credit card bills and personal loan EMIs on a consistent basis, on or before the due date is extremely important. Your payment history significantly influences your credit score and your credit profile. That is why, setting up automatic payments or reminders can help in maintaining sincerity and punctuality on your part. The focus should be on avoiding missing EMIs or credit card bill payment last dates at any cost.

2. Maintain low credit utilisation

According to experts, it is always better to use less than 30% of your available credit limit. High credit utilisation can showcase financial stress and difficulty to lenders. For example, if your credit limit is ₹1,00,000 then try to keep usage below ₹30,000 at all costs.

If you can keep this simple point in mind, while carrying out purchases through your credit card then such a habit can go a long way to help you maintain a healthy credit score.

3. Regularly check and monitor your credit report

Consistently reviewing your credit report and checking it for errors can help in boosting your credit score. Discrepancies such as incorrect personal details and information or unrecognisable transactions should be all disputed promptly.

4. Diversify your credit portfolio

Having an elaborative mix of credit types such as personal loans, home loans, credit cards can positively impact your credit score. It showcases your ability to juggle around and manage various forms of credit in a responsible manner.

5. Limit new credit applications

It is also important to keep in mind that frequent credit applications, such as new personal loan applications, credit card applications etc., can result in several hard inquiries which may lower your credit score.

That is why, you should only apply for new credit only when necessary and also ensure that you meet the eligibility criteria to avoid rejections. The primary reason for not applying for new credit cards and personal loans on a short term basis is to showcase to the lenders that you as a borrower are not overly dependent on credit to meet day to day expenses.

How much time will it take for you to improve your credit score?

Do remember, improving your credit score from 480 to 750 is a slow and gradual process. With sincere efforts such as timely repayments, prudent credit usage, significant improvements can be observed within the next six to twelve months.

Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.