How Can You Calculate Credit Score? And How to Boost it?

A credit score is a number that reflects on a borrower’s creditworthiness. Simply put, it is a measure of creditworthiness. When you apply for an unsecured personal loan, the first thing a lender checks is your credit score to determine your eligibility. Therefore, it is of paramount importance to maintain a healthy credit score.

How is the Credit Score Calculated?

The credit score ranges from 300 to 900. The TransUnion CIBIL credit bureau calculates it after considering factors like the payment history, credit utilization ratio, and credit type and duration. You can run your CIBIL score check online before applying for an unsecured loan.

     Credit Payment History 

Payment history is among the crucial factors affecting the credit score. It impacts your credit score, both positively and negatively. For instance, if you pay your outstanding credit bills along with EMIs on or before the deadline, it will automatically boost your credit score. And if you delay or default in payments, it will reflect poorly on your score. 

Always make your loan payments on time to avoid making an adverse impact on your credit score. 

     Credit Exposure 

After payment history, the credit utilization ratio is the fact that affects your CIBIL score. A credit exposure, also known as the credit utilization ratio, is the amount of credit used in proportion to your available credit limit. Ideally, you should utilize up to 30% of your credit limit because you are considered credit hungry by the lenders if you use more than your credit limit.

 A higher credit utilization ratio also suggests that you are at an increased risk of turning into a defaulter. Hence, it can lead to your loan application rejection. 

     Credit Type and Duration 

If you are someone who has been taking loans for a long time and has followed on-time payments, you will likely receive more loans with exclusive benefits. Having a long credit history with multiple loans suggests that you can handle credit.

 It would be advisable to start building your credit history and then apply for loans to cover the cost of more significant expenses like buying a new house or a luxury car. 

How to Improve your CIBIL Score?

 If you have a credit score below 750, you may not be eligible for a high loan amount or a lower interest rate. However, you can take specific measures to improve your score. 

     Make your Payments on Time 

Loan repayments can have a significant impact on your credit score. You have to maintain discipline when it comes to paying your equated monthly instalments. If you delay or default in paying your EMIs, you will not only have to bear a penalty; it will reflect poorly on your credit score as well.

 If you find that you forget a payment, set a reminder for yourself and ensure that you are making on-time payment. 

     Maintain old Credit Cards

 Maintaining your old credit cards can help you lengthen your credit history. So, if you have old credit cards, it would be wise to maintain them as long as you can pay your bills on time. Building a solid and healthy credit history can help you increase your credit score. 

     Longer Loan Tenure 

When you apply for a personal loan, opt for longer repayment tenure. A longer repayment tenure ensures lower equated monthly instalments, and a lower EMI suggests that you will be able to make payments on time. When you pay your EMIs on time, it will automatically improve your credit score.

      Customize your Credit Limit 

The credit utilization ratio is an essential factor influencing your credit score. If you restrict your credit limit as per your usage, you will likely prevent a negative impact on your CIBIL score. You can also contact your lender and customize your credit limit based on your requirements.

      Avoid taking on Multiple Debts at Once 

You should avoid taking multiple loans at one time. First, repay one loan amount and then take another to keep your credit score from crashing. Taking multiple loans means that you are in an unforgiving cycle where you have insufficient funds, which further decreases your CIBIL score.

      Check your CIBIL Report for Mistakes 

Sometimes, CIBIL can make mistakes while recording your personal and credit information or delay recording your details. Minor mistakes will bring down your credit score. So, run a CIBIL score check and inspect your CIBIL report for mistakes and errors. Rectify those mistakes before it is too late.


If you have a poor credit score and you need a loan, then you can incorporate certain habits in your life to improve your credit score over time. Those mentioned above can help you improve your score; however, remember that it can take six months to one year to see changes in your credit profile. 

If you think you have a better credit score, you can opt for Fullerton India online personal loan and enjoy a maximum loan amount with a lower interest rate.