Learn about gift cards
What is a gift card?
Also known as brand vouchers, gift vouchers and brand cards, gift cards are a digital mode of payment which carries a amount along with a pin / card no. You can buy these gift cards and use them to pay on 300+ brand online and offline as well.
Why should I use a gift card?
Gift cards help you get great value on your purchase with a brand. They simplify giving, help with budgeting, and are easily sent across distances, ensuring your thoughtful gesture brings joy and value.
How to use a gift card?
To use a gift card, simply present it at the time of purchase in-store or enter the card’s unique code at checkout when shopping online. The amount of your purchase will be deducted from the card's balance.

Understanding and Managing Your Credit Score: Long, But Simple Guide

Last updated :
March 10, 2024

minutes read

Let's be honest, financial content can be pretty dull. But we're here to change that. Trust us, by the end of this guide, you'll be the most informed and interesting person in the room when the topic of credit scores comes up.

Our guide is tailored specifically to the needs of young Indian employees and graduates. No more trying to decipher how advice from the other side of the globe applies to you.

By the end of this guide, you'll have a solid understanding of credit scores and be equipped to manage yours like a pro. You'll be able to watch your credit score soar as you apply the insights and tips you've learned. So, grab your favourite snack, find a cozy spot, and let's dive into the fascinating world of credit scores!

I. Why should you care about your credit score?

Let's talk about why credit scores should matter to you. You might be thinking, "I'm just starting my career, why should I bother about credit scores now?" Well, my friend, that's precisely why it's important to start caring early! So, let's dive into the nitty-gritty of why credit scores are essential, especially in modern India.

A. The importance of credit scores in modern India

As India marches towards a more digital and financially inclusive society, credit scores are playing an increasingly crucial role. Gone are the days when you could simply borrow money from your friendly neighbourhood uncle without any documentation. With financial institutions becoming more vigilant and risk-averse, your credit score has become the ultimate passport to availing various financial services and benefits.

For instance, did you know that in 2022 alone, over 24% of the adult population in India had taken out a loan from a financial institution? That's a whopping 258 million people! And your credit score can be the deciding factor for whether or not you become a part of that statistic.

B. How it impacts your future financial life

So, you've got your first job and you're earning a decent income. You might think credit scores are a far-off concern, but let's paint a picture for you. A few years down the line, you decide to buy your dream car or home. You apply for a loan and… BAM! You're hit with a high-interest rate or, worse, your loan application is rejected because of a poor credit score. Ouch!

Your credit score impacts not just loan approvals, but also the interest rates you're offered. A high credit score could save you lakhs of rupees in interest payments over the years. So, starting early and nurturing a good credit score is like investing in a brighter financial future for yourself.

C. Did you know? The Role of credit scores in securing loans and Jobs

It's not just about loans and interest rates, though. Believe it or not, your credit score can also affect your job prospects! With companies becoming more diligent in their hiring process, many now check credit scores as a part of their background checks. After all, they wouldn't want to hire someone who can't manage their own finances, right?

So, there you have it. Your credit score is like that overachieving sibling you can't ignore – it's crucial for your financial well-being and even your career. Now that we've piqued your interest, let's dig deeper into what makes up a credit score and how you can master the art of maintaining a healthy one.

II. Demystifying the credit score:

Now that we've established the importance of credit scores, it's time to unravel the mystery behind them. Think of it like decoding the secret recipe of your favourite dish (hint: it's not just about the spices). So, put on your detective hats, and let's dive into the world of credit scores!

A. What is a credit score, and how is it calculated?

A credit score is like your financial report card, but instead of grades, you get a number (usually between 300 and 900). This magical number represents your creditworthiness, which is just a fancy term for how likely you are to repay your loans on time. In simple words, a higher score means you're a responsible borrower, and lenders love that!

But how is this number calculated, you ask? Well, various factors are considered, such as your payment history, credit utilization, length of credit history, types of credit, and recent credit inquiries. The exact formula might vary between credit bureaus, but these factors remain the key ingredients in cooking up your credit score.

B. The Credit Bureaus of India: CIBIL, Experian, Equifax, and CRIF High Mark

Meet the superheroes (or supervillains, depending on your perspective) of the credit score world – the credit bureaus! These are the organizations that collect and maintain credit information on millions of borrowers like you and me. In India, we have four major credit bureaus: CIBIL, Experian, Equifax, and CRIF High Mark.

These bureaus receive information from banks and other financial institutions and use their secret sauce (the aforementioned factors) to calculate your credit score. Remember, each bureau might have slightly different scores for you, but they should be in the same ballpark. So, don't be alarmed if your CIBIL score isn't identical to your Experian score.

C. Range and ratings: Where do you stand?

Now, let's talk about the credit score range. As mentioned earlier, credit scores typically fall between 300 and 900. But what does that mean for you? Here's a quick breakdown:

  • 300-549: Poor (Lenders might give you the side-eye)
  • 550-649: Fair (You're getting there, but there's room for improvement)
  • 650-749: Good (You're in the safe zone – lenders are more likely to trust you)
  • 750-900: Excellent (You're the star borrower, and lenders will roll out the red carpet for you!)

So, where do you stand in this range? If you're unsure, don't fret – we'll cover how to find out your credit score and ways to improve it later in this guide. Remember, it's never too late to work on your credit score and achieve financial greatness!

III. Factors that influence your credit score:

Now that we've unravelled the mystery of credit scores, let's delve deeper into the factors that influence them. Picture this: you're an artist, and your credit score is a beautiful painting. Each factor adds a unique colour to the canvas, ultimately creating a masterpiece (or not, depending on how well you manage them!). So, grab your palette, and let's explore the colours of your credit score!

A. Payment history: Be timely, be rewarded

When it comes to your credit score, punctuality is key! Your payment history (i.e., whether you pay your bills and loans on time) is the single most crucial factor. In fact, it contributes to a whopping 35% of your credit score. So, if you're the kind of person who misses deadlines or forgets to pay bills, it's time to set those reminders and become best friends with your calendar!

B. Credit utilization ratio: Balancing your act

Did you know that how much credit you use compared to your credit limit can impact your score? This is called the credit utilization ratio, and it's responsible for about 30% of your credit score. Lenders prefer a low ratio, ideally below 30%. So, if your credit limit is ₹1 lakh, try to keep your outstanding balance below ₹30,000. It's all about balance, just like yoga!

C. Credit history length: The story of your financial past

Think of your credit history length as a gripping novel that tells the tale of your financial past. The longer your credit history, the better it is for your credit score. This factor accounts for around 15% of your score. So, even if you've had a rocky start, it's never too late to turn the page and work towards a happier financial ending!

D. Types of credit: Variety is the spice of life (and credit scores)

As the saying goes, variety is the spice of life, and this holds true for your credit score as well. Having a mix of different types of credit, like credit cards, personal loans, and car loans, can work in your favour. This factor contributes about 10% to your credit score, so don't be afraid to diversify your credit portfolio, but do so responsibly!

E. Credit inquiries: Too many cooks spoil the broth

Finally, let's talk about credit inquiries. Every time you apply for a loan or credit card, the lender checks your credit report, which is called a "hard inquiry." While a single inquiry may not have a significant impact, multiple inquiries within a short period can raise red flags and lower your credit score. So, remember, too many cooks (or loan applications) spoil the credit score broth!

Now that you've learned about the factors that influence your credit score, you're one step closer to becoming a credit score maestro. Up next, we'll guide you on how to check your credit score and, more importantly, how to improve it. Let the financial transformation begin!

IV. Tips to improve and maintain a healthy credit score:

So, you're ready to roll up your sleeves and work on that credit score, eh? Well, we've got your back! Here are some tried and tested tips to improve and maintain a healthy credit score. Think of them as your personal credit score gurus, guiding you on your path to financial enlightenment.

A. Be punctual with payments: Avoid the late payment trap

Remember how we said punctuality is key? Well, let's reiterate that: Be. On. Time. Set reminders, mark your calendar, or tie a string around your finger (okay, maybe not that last one) – do whatever it takes to avoid late payments.

Pro tip: Automate your bill payments so you never have to worry about missing a deadline. It's like having a personal assistant for your finances!

B. Smart credit utilization: A practical guide

As we discussed earlier, keeping your credit utilization ratio low is crucial. Here's a quick recap: aim for a ratio below 30%. To achieve this, you can either pay off your balances more frequently or request a credit limit increase (but don't use that as an excuse to spend more!). It's all about smart credit management, just like how you balance your plate at an all-you-can-eat buffet!

C. Mix it up: How diverse credit can work wonders

Having a diverse credit portfolio is like having a colourful financial garden. You've got to mix it up with different types of credit to maintain a healthy credit score. So, go ahead and plant those seeds of variety – responsibly, of course. Just remember not to apply for too many loans or credit cards at once. Slow and steady wins the credit score race!

D. New credit applications: When and how to apply

When it comes to applying for new credit, timing is everything. Avoid submitting multiple applications in a short period. Instead, space them out and apply only when necessary. And before you apply, do your research to find the best options that suit your needs. With the right strategy, your credit score will thank you!

E. The role of credit monitoring: Keep an eye on your score

Last but not least, monitor your credit score regularly. It's like checking your reflection in the mirror – you need to know how you're doing to make improvements. You can get one free credit report per year from each of the four major credit bureaus in India. So, make a habit of reviewing your credit report and keeping an eye out for any discrepancies or potential issues.

And there you have it – the secrets to improving and maintaining a healthy credit score revealed! With these tips, you're well on your way to becoming a credit score superstar. Go forth and conquer the world of personal finance, and remember: the power to achieve financial greatness is in your hands!

V. Common misconceptions about credit scores:

Like the twists and turns of a Bollywood movie, the world of credit scores is full of misconceptions and myths. And just as you need an unbiased friend to dissect the latest blockbuster, we're here to help you separate fact from fiction when it comes to credit scores. So, grab some popcorn, and let's debunk some common misconceptions!

A. Busting myths: Income, age, and marital status

First things first, let's tackle some of the most widely believed myths about credit scores. Believe it or not, your income, age, and marital status have absolutely no impact on your credit score! That's right – your credit score doesn't care if you're a millionaire or a struggling artist, 25 or 65, married or single. It's all about how responsibly you manage your credit, so focus on that instead of these irrelevant factors.

B. The truth about checking your own credit score

Here's another myth that needs busting: checking your own credit score will hurt it. Wrong! When you check your own credit score, it's considered a "soft inquiry," and it doesn't affect your score at all. So, feel free to check your score as often as you like without any fear. It's like window shopping – you can look all you want without spending a single rupee!

C. Does closing a credit card account help your score?

Many people believe that closing a credit card account will boost their credit score. Unfortunately, this isn't always true. In fact, closing a credit card account can sometimes hurt your score, especially if it's an older account with a good payment history. Remember how we talked about the importance of credit history length? Closing an old account could shorten that history, and nobody wants that!

Instead of impulsively closing a credit card account, consider the impact it could have on your credit score. If the card has a high annual fee or a high-interest rate that you're struggling to manage, it might make sense to close it. But if it's an older account with a positive history, think twice before bidding it farewell.

And there you have it – some of the most common misconceptions about credit scores, debunked! With this newfound knowledge, you can navigate the world of credit scores with confidence, knowing that you've got the facts on your side. So, go ahead and show off your credit score expertise to your friends and family – who knows, you might just become their go-to financial guru!

VI. How to deal with a low credit score:

So, you've discovered that your credit score is a little... well, let's just say it's not where you'd like it to be. Don't worry – we've all been there! Remember, even the mightiest of Bollywood heroes face setbacks before they rise like a phoenix from the ashes. It's time to channel your inner hero and turn that low credit score around. Here's how:

A. Don't panic! Your step-by-step plan to bounce back

First and foremost, don't panic! A low credit score isn't the end of the world, but it does mean you need to take action. Here's a step-by-step plan to help you bounce back:

  1. Identify the factors dragging down your score: Late payments? High credit utilization? Address these issues first.
  2. Create a budget: Track your expenses, cut down on unnecessary spending, and allocate funds for debt repayment.
  3. Pay your bills on time: Set up automatic payments or reminders to ensure you never miss a deadline.
  4. Work on reducing your credit utilization: Pay off outstanding balances and avoid maxing out your credit cards.
  5. Monitor your credit score regularly: Keep track of your progress and celebrate small victories along the way.

B. Rebuilding credit: A tale of patience and persistence

Rebuilding your credit score is like growing a plant – it takes time, patience, and persistence. Remember, slow and steady wins the race. Set realistic goals for yourself and be prepared for the journey ahead. With consistent effort and responsible financial habits, you'll soon see your credit score bloom like a beautiful flower in the garden of financial success!

C. Seeking professional help: When to consult a credit counsellor

If you're struggling to improve your credit score on your own or feel overwhelmed by the process, don't hesitate to seek professional help. Just as you'd consult a doctor for a health issue, sometimes it's best to turn to a credit counsellor for financial guidance. These professionals can help you create a customized plan to rebuild your credit, negotiate with creditors, and provide valuable advice on managing your finances.

So, whether you're tackling your low credit score solo or with the help of a credit counsellor, remember: the power to change your financial future is in your hands. Stay focused, stay positive, and soon, you'll be well on your way to a healthier credit score and a brighter financial future!

VII. Conclusion:

And just like that, we've reached the end of our credit score journey together! But hey, don't be sad – this isn't a goodbye; it's just the beginning. Your journey to credit score mastery starts now, and we're here to cheer you on as you build a brighter financial future. So, let's take a moment to recap what we've learned and plan our next steps together, shall we?

A. Recap: What we've learned together

Throughout this guide, we've covered a lot of ground, from understanding the importance of credit scores in modern India to debunking common myths and misconceptions. We've also shared valuable tips and strategies to help you improve and maintain a healthy credit score. Pat yourself on the back – you're now a credit score ninja!

B. Moving forward: Apply the insights to your financial life

Now that you're armed with all this knowledge, it's time to put it into action. Take a good look at your current financial situation, identify areas for improvement, and start implementing the strategies we've discussed. And remember, it's all about patience, persistence, and continuous effort. You've got this!

C. A supportive community: Sharing experiences and tips

As you embark on your credit score journey, don't forget that you're not alone. Reach out to friends, family, or online communities to share your experiences and learn from others. Who knows, you might even pick up some new tips and tricks along the way! After all, we're all in this together, and there's nothing like a little camaraderie to make the journey more enjoyable.

D. Stay curious: Continual learning for financial success

Finally, always stay curious and never stop learning. The world of personal finance is ever-evolving, and there's always something new to discover. Keep reading, asking questions, and seeking knowledge – your financial future will thank you for it. And hey, maybe someday, you'll even share your own insights and experiences with others on their credit score journey!

So, here's to you, dear reader – the future credit score superstar! May you go forth and conquer the world of personal finance! We're rooting for you every step of the way!


Before we send you off into the world of credit score mastery, we want to make sure you have all the tools you need to succeed. In this appendix, we've compiled a list of useful resources and a handy glossary of credit score terms. So, without further ado, let's dive in!

Useful resources for credit score management and monitoring

Here are some helpful websites and apps that can assist you in managing and monitoring your credit score. These resources will not only keep you informed about your credit score but also offer valuable insights and tips to help you improve it:

  1. CIBIL: As one of India's leading credit bureaus, CIBIL offers a range of services, including credit score monitoring and personalized recommendations for credit improvement.
  2. Experian: Another major credit bureau in India, Experian provides credit reports, credit score monitoring, and valuable financial resources to help you stay on top of your game.
  3. Equifax: Equifax offers credit score monitoring and reports, as well as insightful articles on various personal finance topics.
  4. CRIF High Mark: As the fourth credit bureau in India, CRIF High Mark provides credit scores, reports, and personalized advice to help you improve your credit score.
  5. CreditMantri: This platform offers credit score checks, and credit improvement advice, and even helps you find the best financial products suited to your needs.

Remember, it's important to keep track of your credit score regularly to monitor your progress and stay informed about any changes.

Glossary of credit score terms for easy reference

As you dive deeper into the world of credit scores, you might come across some jargon that leaves you scratching your head. But don't worry – we've got your back! Here's a handy glossary of common credit score terms to help you make sense of it all:

  • Credit Score: A numerical representation of your creditworthiness, typically ranging from 300 to 900, used by lenders to assess the risk of lending to you.
  • Credit Bureau: An organization that collects and maintains credit information about individuals and businesses, and provides credit reports and scores to lenders and other entities.
  • Credit Report: A detailed record of your credit history, including information about your loans, credit cards, and payment habits, compiled by a credit bureau.
  • Credit Utilization Ratio: The percentage of your available credit that you're currently using, calculated by dividing your total credit card balances by your total credit limits.
  • Payment History: A record of your past payments, including on-time payments, late payments, and defaults, which plays a significant role in determining your credit score.
  • Credit Inquiry: A request made by a lender or other entity to review your credit report, which can be classified as either a hard inquiry (affecting your credit score) or a soft inquiry (not affecting your credit score).

With these resources and glossary at your fingertips, you're all set to conquer the world of credit scores!

Fashion Tour of India: Click & Discover!
Dive into India's colorful wardrobe with our easy-to-use map! Just click on a state and see what people wear, from timeless classics to trendy outfits. Plus, check out the cool brands they love. It's fun, fast, and full of surprises!
😎 Top selling gift cards now
Lifestyle (Online)
Lifestyle (Online)
😎 Top selling gift cards now
😎 Top selling gift cards now
More in this series

Claim This Offer
Only on Hubble Money
Shuaib Azam
Shuaib is a Marketing & Growth lead at Hubble. When he isn't working on growth initiatives, Shuaib writes fiction and doodles space monkeys.

Claim This Offer
Only on Hubble Money

More like this

No items found.
Get rewarded every time you shop.
Up to 10% discount on 300+ brands