How to Improve & Increase your Credit Score to become eligible for a Personal Loan

5 March, 2025

Synopsis: 

• A good credit score (750 or above) enhances your chances of securing a Personal Loan with favorable terms, while a low score may lead to high interest rates. 

• To improve your score, check your credit report for errors, use credit wisely, make timely payments, and maintain a balanced credit mix. 

• HDFC Bank customers can check their credit score via NetBanking to stay Loan-ready! 
  
  

Get your credit score right: How to become eligible for a Personal Loan with a low credit score  

A Personal Loan is useful to fund a range of financial needs, including home renovation, children’s education, medical emergency, family wedding or a dream vacation. To improve your chances of getting a Personal Loan in the near or long-term future and securing reasonable interest rates, you need to have a good credit score.  The credit score is an indicator of a person’s creditworthiness, or their ability to repay Loans.  

Ideal Credit Score to Avail a Personal Loan 

Since Personal Loans don’t require collateral, lenders rely heavily on your credit score to assess your eligibility. A credit score between 720 and 750 is generally considered ideal. It increases your chances of quick approval and favorable interest rates. If your score falls between 600 and 700, you might still qualify, but the approved Loan amount could be lower. However, a score below 600 is usually deemed insufficient for a Loan approval. 

How to Improve your Credit Score? 

Follow our guide to enhancing your credit score that will increase the likelihood of being eligible for a personal loan with a low credit score 

Check your credit score  

HDFC Bank customers can check their credit score via NetBanking.  
 
If you are not an HDFC Bank customer, you request your credit report directly from the credit bureaus. You may need to make a payment to access the report.  
 
Inspect the report carefully, looking for any errors such as a closed Loan marked as pending or a Loan you never applied for. File a dispute with your preferred credit bureau  to rectify the errors, if required, because these could affect your rating and give you a lower score. 

Use credit wisely  

It is a good idea to use your Credit Card regularly, as under-utilisation can lead to a decreased credit limit. This can have a negative impact on your credit score.  
 
A good thumb rule is to use up to 50% of your credit card limit a month. 

Pay your dues  

Not only should you pay all your dues, but you should also pay them on time, such as Loan EMIs and Credit Card bills.  
 
Late repayments have an adverse effect on credit scores.

Keep it balanced  

If you do need credit, opt for a mix of secured and unsecured Loans (i.e., debt with and without collateral). 
 
Maintain a reasonable debt-to-income ratio. The higher the debt vis-à-vis your income, the lower your credit score.  
 
To get a good Personal Loan, you need to have a good credit score. 
Check your credit score today to get the best Personal Loan rates now! #Startdoing now! 

* Terms & conditions apply. Loan disbursal at sole discretion of HDFC Bank Ltd