Most Indians never learn how to build credit score, and banks or financial institutions haven’t exactly made it easy to figure this out. No income proof, no credit history, no credit card. It’s a loop that’s genuinely hard to break out of. These barriers to entry make it quite difficult for regular users to get credit cards or loans for their desired purposes, even if they have the ability to repay the loans.
Why Does Your Credit Score Matter More Than You Think?
With a credit score of 750 or higher, getting approved for loans or credit cards becomes much easier. Here’s the thing: your credit score affects more than just approval. It also decides your interest rate. Honestly, most people don’t realise how much a low credit score is quietly costing them until they actually do the math.
How To Actually Start Building Your Credit Score?
The good news: you don’t need a high income or an existing credit history to start. You just need to opt for the right entry points.
- Start With A Secured Credit Card:
You deposit a fixed amount with a bank, and they give you a secured, beginner credit card against that deposit. You spend, you repay, and every on-time payment gets reported to credit bureaus like CIBIL.
Over 2 to 3 months of consistent use, you build a real credit history from scratch. Honestly, this is where most people should just start and stop overthinking it.
- Get A Credit-Builder Loan:
Some NBFCs and fintech platforms now offer small credit-builder loans through a credit builder app. The idea is simple: you repay in EMIs, those repayments get reported to bureaus, and your score climbs. You’re not spending the money on anything useful; you’re essentially paying to build your record.
- Become An Authorised User On A Family Member’s Card:
If a parent or spouse has a credit card with a solid repayment history, ask them if you can be added as an authorised user. Their positive history can reflect on your profile too. You don’t even need to use the card; just being linked to a healthy account can give your score a quiet lift.
- Pay Every Loan EMI On Time. Without Exception:
This one sounds obvious, but it’s where most people silently damage their scores without realising it. A single missed EMI or credit card payment can drop your score by 50 to 100 points and stay on your record for years. Set up auto-pay. Even paying the minimum due is better than missing a payment entirely.
- Keep Your Credit Utilisation Low:
If your credit limit is ₹50,000, try not to consistently use more than ₹15,000 to ₹20,000 of it. Bureaus read high utilisation as financial stress, even if you’re repaying in full every month. Keeping usage below 30% of your overall credit limit signals that you’re not dependent on credit.
- Check Your Credit Report Regularly:
Errors on credit reports are more common than people expect. You’re entitled to one free CIBIL report per year, and it’s worth checking the report through a credit score app. Dispute errors through the bureau’s website. Getting a wrong entry removed can meaningfully move your score, sometimes by more than you’d expect.
Building credit is slow work. But a score built carefully over a few months can open doors that were entirely closed before. It’s completely natural to hesitate when you can’t decide what steps can be undertaken to build your credit score. Hopefully, now you feel a sense of security, given the number of options available that can help you build that.