A good credit score makes it easier to get approval for financial products like personal loans, home loans, and credit cards. In fact, a good credit score and a strong credit history are crucial for those who want to avail personal loans, premium credit cards, or home loans at affordable interest rates. However, many people believe that improving their credit score is a long-term and difficult process.

But the truth is, with a little financial prudence and discipline, you can see positive changes within about 30 days. Most lending institutions in the country update credit data every 15 days. This means that if you make timely payments and take some smart steps, the impact can be seen on your credit profile quickly.

1. Pay EMIs and Credit Card Bills on Time

Payment history is the most important part of a credit score.
It contributes about one-third to the score.
Missing even one EMI or bill is detrimental.
The impact can last for months.
Timely payments are crucial.
Using auto-debit is beneficial.

2. Keep Credit Utilization Low
Use less than 30% of your credit limit.
High utilization can lower your score.
On a ₹2 lakh limit, keep spending below ₹60,000.
Avoiding high outstanding balances is essential.
Pay before the bill is generated.
This strengthens your credit profile.
A rapid improvement in your credit score is visible.

3. Check for Errors in Your Credit Report
Closed loans sometimes appear as "open."
There might be incorrect default entries.
Errors in name or PAN can lower your credit score.
You should check your credit report regularly.
Object immediately if you find an error.
Correction leads to quick improvement in your score.

4. Do Not Apply for Loans or Cards Frequently
Every application results in a hard inquiry.
Too many inquiries lower your score.
Frequent applications are detrimental.
Continuous rejections give a negative signal.
It can indicate "credit hunger."
Apply only when necessary. It's important to maintain a difference in applications.

Some Smart and Effective Planning for Borrowers
Keep old accounts active.
Old credit accounts strengthen your credit score.
The older the account, the more trust you'll build.
Use your oldest credit card occasionally.
Regularly check the monthly or annual charges on your card.
Maintain diversity in your credit mix.
A good balance of secured and unsecured loans is a positive sign.
This demonstrates responsible credit behavior.
Paying EMIs and bills on time is crucial.
This strengthens your credit score.
It leads to a better financial situation in the long run.

In a nutshell
Borrowers who follow these simple yet effective tips can see signs of improvement in their credit score within a month.  Overall, this makes loan and credit card approvals easier, results in lower interest rates, and more favorable terms. (Disclaimer: This article is for general information and awareness purposes only.  Consult a certified financial advisor before making any decisions related to loans or credit.)

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