The SME Owner's Guide to Credit Scores

Best rates, instant approval at most lenders

Competitive rates, most products available

Approved but at higher rates, limited lenders

Most lenders decline or require additional collateral

Pay on time, every time

Payment history is the single biggest factor in your CIBIL score — accounting for about 35%. Set up auto-debit for all EMIs. Even one missed payment stays on your report for 7 years.

Keep credit utilisation below 30%

If your credit card limit is ₹1 Lakh, keep your balance below ₹30,000. High utilisation signals financial stress to lenders. Pay down balances before your statement date.

Avoid multiple loan applications

Every time you apply for a loan or credit card, the lender does a hard inquiry which reduces your score by 5–10 points. Space out applications by at least 6 months.

Maintain a healthy credit mix

Having both secured loans (home, auto) and unsecured credit (credit cards) shows lenders you can handle different types of debt responsibly.

Keep old accounts open

The age of your credit history matters. Closing old credit card accounts reduces your average account age and can lower your score. Keep them open with minimal usage.

Check your CIBIL report regularly

Errors on your CIBIL report are more common than you think — incorrect details, wrongly reported missed payments, or accounts that are not yours. Dispute errors at cibil.com.