Credit score boost: How long does it really take to improve your rating? Find out

If you are planning to raise a personal loan remember that one of the key criteria that determines your application is your credit score.

You can check your credit score for free here on Livemint. Let us suppose you want to raise a loan and your application was denied because of a poor credit score. Then you would certainly want to improve your score to improve your chances to procure a loan.

Notably, it takes anywhere between 3 to 6 months to improve your credit score for moderate improvements (such as 30 to 50 points) and 6 to 12 months for significant jumps (100 points or more). The exact time period is a function of a number of factors including your current credit score and financial behaviour.

Factors affecting credit score improvement

1.Credit card payments and loan EMIs (1-6 Months): Paying your dues on time consistently can boost your score within 3-6 months. One missed EMI can take months to recover from.

2.Credit utilisation ratio (1-3 Months): Keep credit utilisation below 30 per cent (i.e., use ₹30,000 max if your credit limit is ₹1,00,000). Lowering high utilization can show effects within 1-3 months.

3.Clearing old dues & settlements (3-9 Months): If you have an unpaid credit card balance or settled loans, clearing them gradually improves your score in 3-9 months.

4.New credit applications (3-6 Months): Avoid applying for too many loans or credit cards in a short period, as each inquiry lowers your score temporarily. If you stop applying for multiple credits, your score may recover in 3-6 months.

5.Increasing credit mix and history (6-12 Months): Having a mix of secured (home/car loan) and unsecured (credit card, personal loan) credit helps.

The longer your credit history, the better—which means improvement takes time.

How to improve your credit score faster? Take these steps

1. It is recommended to pay your EMIs and credit card bills on time.

2. You should reduce outstanding debt — especially if your utilisation is more than 50 per cent of your credit limit.

3. You should avoid frequent new credit applications (particularly personal loans).

4. You can raise your credit limit but keep utilisation low.

5. You can even use a credit-builder product such as secured credit cards (which is issued against an FD) or small-ticket personal loans.

6. You should check your credit report for errors and get them rectified to improve score.