How to improve your credit score fast in just 12 months — step-by-step guide for 2025

Credit score is quite pertinent for borrowers as lenders take a decision of loan approval based on it. Those borrowers whose credit score is poor can take some radical decisions of improving the score, becoming eligible to raise loan on convenient terms and conditions. These convenient terms include lower interest rates and faster processing.

Improving credit score is a lengthy process, so it is advisable to commence as soon as you can for it to improve by the end of the year.

Credit score: Steps to take to improve it

I. Rectifying the mistakes: First and foremost, you need to check your credit report and make sure that you get the mistakes rectified. For instance, there could be some payment shown as ‘pending’ but it is no longer pending.

II. Lower credit utilisation: It is advisable to bring down credit utilisation and keep it less than 30 percent. For instance, if your total credit limit is ₹20 lakh, you can keep credit utilisation below ₹6 lakh. To maintain healthy ratio, you could even keep more than one credit card so that you are compelled to max out your card.

III. Healthy credit mix: Another strong tip to improve your score is ensure healthy credit mix which means keeping a mix of different credit options such as credit card, personal loan and car loan. Obviously, if you do not need a card or home loan, you should not opt for it. But you could consider taking a credit card which does not lead to any immediate liability unless you use it.

IV. Clearing your dues: Importantly, you should ensure that you pay your dues promptly. Even a single default of dues can lead to considerable loss of credit score.

V. Old credit cards: It is recommended not to deactivate an existing and old credit card. Length of credit card is useful in helping maintain a good credit score.

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 score. 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.

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