Credit Score

A credit score is a three-digit number, typically ranging from 300 to 900, that represents your creditworthiness at a point in time. It is derived from the information in your credit information report — your history of credit accounts, your payment behaviour, your current debt levels, and the number of new credit enquiries against your name. In India, all four credit bureaus — CIBIL, Experian, Equifax, and CRIF High Mark — use versions of the 300-to-900 scale, where a higher number indicates better creditworthiness.

The score is calculated using five factors, each carrying a specific weight. Payment history accounts for approximately 35% of the score — this is the single most important factor, and a record of on-time payments consistently across all credit accounts is the most reliable way to build and maintain a high score. Credit utilisation, meaning the proportion of your available credit limit that you are using, accounts for approximately 30% — keeping utilisation below 30% of your total limit is widely recommended, and below 10% is considered optimal. The length of your credit history accounts for approximately 15% — longer histories provide more data for the model and are viewed more favourably. The mix of credit types — credit cards, personal loans, home loans, and other products — accounts for approximately 10%. New credit enquiries account for the remaining 10%.

For Indian credit card applications, a score of 750 or above is generally considered good enough for approval at most issuers. Many premium and super-premium cards prefer scores of 775 to 800 or higher. Cards with the most generous reward structures and lowest interest rates are reserved for applicants with scores above 800.

Improving your credit score requires consistent on-time payments across all credit accounts — this is the most impactful action you can take. Reducing your credit utilisation by paying down balances or requesting a limit increase helps. Avoiding new credit enquiries in the 3 to 6 months before a major credit application preserves your score. Checking your credit report annually for errors and disputing any inaccuracies you find is also important, because an error in your report — such as an account that is not yours or an incorrect payment record — can drag your score down without you knowing.

A common misconception is that holding multiple credit cards automatically damages your score. Having several cards is not harmful if you manage them responsibly, keep utilisation low, and make payments on time. In fact, having a diverse credit mix and a long account history can be positive factors. What does hurt your score is missing payments, defaulting on any account, having very high credit utilisation, and applying for multiple new credit products in a short period.