A credit score of 580 is generally considered subpar, that is, below the usual standard, in India. This can hinder access to favourable loan terms, credit cards and other premium credit products.
However, with strategic financial planning and the development of sound money management habits, borrowers can significantly improve their credit scores within a few months
According to Sameer Mathur, MD and Founder of Roinet Solution, “One of the most effective and reliable ways to improve a low credit score, such as 580, is by taking a secured credit product like a gold loan. Since gold loans are backed by collateral, they are easier to obtain even with a low credit score and can help rebuild credit when repaid consistently and on time.”
Let us explore simple ways borrowers in 2025 can boost their credit scores, raising them from 580 to a healthy range of 750 or above.
Prioritise timely repayments
Paying your credit card bills and loan EMIs on time demonstrates financial responsibility. Payment history is a key component of credit scoring models and carries significant weight in helping lenders determine whether to extend credit to a borrower.
Setting up automatic debit instructions for timely payment of credit card bills and outstanding personal loan EMIs can help borrowers stay consistent and demonstrate sincerity and punctuality in managing their credit obligations.
Focus and maintain low credit utilisation
Your credit utilisation ratio is the percentage of available credit being used. This figure should ideally be kept below 30 per cent.
For example, if your total allowed credit limit is ₹1,00,000. Then you should aim to use no more than ₹30,000 out of this total figure. The reason for the same is that a high credit utilisation indicates over-dependence on credit. This can negatively affect your credit score and your overall credit profile.
Therefore, lenders do not like it when borrowers have heavy debt reliance. It is hence always better to keep your credit utilisation ratio as low as possible.
Diversify your credit mix and go for secured credit products
A clearly defined, balanced mix of unsecured (such as credit cards) and secured (such as home loans, gold loans) credit shows the ability to manage various credit types. This diversity can positively influence your credit score.
The objective here is to show that you can efficiently manage repayments of your unsecured and secured loans. This involves both distinct loans and credit card bills. This way a diversified credit mix, managed professionally, can go a long way in boosting your credit scores and keeping your overall credit profile healthy.
Limiting new credit applications
Each and every new credit card or loan application can result in a ‘hard inquiry’. Such a development can temporarily lower your credit score. That is why you should avoid applying for multiple credit lines in a very short period of time. This can help in ensuring that you maintain score stability.
The idea here is to show self-reliance for financial needs. Your borrowing applications, such as new credit card applications, new loan requests, etc., should not show desperation or urgency to the respective lenders. This is taken as a massive red flag and can even result in rejection.
Regularly check, go through and monitor credit reports
If you regularly check, go through and monitor credit reports, then such a behaviour can positively affect your credit score. This way, you will also be able to identify mistakes and discrepancies that might be dragging your credit score down.
Once you identify errors in your credit report, you can raise the issues with the respective credit bureaus. In India, the primary credit bureaus are CRIF High Mark, CIBIL, Equifax, and Experian. Promptly reporting discrepancies to the relevant bureau can help resolve them efficiently.
By implementing these simple yet effective strategies, individuals can improve their credit scores, paving the way for better financial opportunities in the future.
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 scores. 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.
