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CIBIL Ki Pathshala Β· Lesson 2

The 5 things that actually move your score

Short answer

Bureau formulas are private, but the factors are well known: payment history (~35%), credit utilisation (~30%), credit age (~15%), credit mix (~10%) and hard inquiries (~10%). Paying on time and keeping utilisation under 30% is roughly 65% of the game.

The five factors, in rough order of weight

Every bureau guards its exact formula, but the ingredients and their approximate weights are well established.

FactorRough weightWhat it measures
Payment history~35%Did you pay on time, every time?
Credit utilisation~30%How much of your limit you use
Credit age~15%How long your accounts have existed
Credit mix~10%Cards and loans, handled well
Hard inquiries~10%How often you applied recently

1. Payment history (~35%)

One missed payment reported to a bureau outweighs months of good behaviour. This is the factor to protect above all others, and it is also the easiest to automate: autopay on Total Amount Due, plus a reminder three days before the due date.

A payment is "late" for bureau purposes once it crosses the reporting threshold your lender uses β€” typically 30 days past due. Paying a day late may still cost you a late fee even if it never reaches your report, so neither deadline is worth testing.

2. Credit utilisation (~30%)

Utilisation is the balance reported at statement date divided by your total limit. Under 30% is the widely used healthy zone.

The subtlety: it is measured at statement date, not on the due date. So you can pay every bill in full, never owe a rupee of interest, and still show high utilisation if your statement closes right after a big purchase.

The mid-cycle payment trick: If a large purchase would push you over 30%, pay part of it before the statement generates. The bureau then sees a smaller balance, your score stays comfortable, and you still owe no interest.

3. Credit age (~15%)

Older accounts signal a longer track record. Your oldest card quietly anchors this number β€” which is why closing it is usually a mistake. See the myths lesson.

4. Credit mix (~10%)

Handling different kinds of credit β€” a card plus a loan, say β€” reads better than a single type. This is not a reason to take a loan you do not need. It is a reason not to worry when you have both.

5. Hard inquiries (~10%)

Every application creates a hard inquiry and a small, temporary dip. One is nothing. Five in a month reads as distress, and lenders treat it that way.

A practical rule: Space credit applications a few months apart, and check your eligibility with a soft-check tool where the lender offers one. Our own eligibility educator is purely educational β€” it makes no inquiry of any kind, because it never touches a bureau.

What none of this includes

Your salary, savings, spending pattern and debit card usage are not in the score. Lenders consider income separately, when they assess affordability.

Putting it together

If you want the shortest possible instruction set:

  1. Pay in full, on time, every month.
  2. Keep reported balances under ~30% of your limits.
  3. Keep old, free cards open.
  4. Apply rarely and deliberately.
  5. Read your own report once a year and dispute errors.

That is most of the model, and all of it is free. Try the combinations in the score habit simulator β€” it is an illustrative teaching model, not a prediction.

Next: the four myths that damage real scores.

All figures on this page are indicative and dated. Rates and fees differ by bank and change over time. Always verify with your bank's official schedule of charges.

Frequently asked questions

What is the single biggest factor in a credit score?

On-time payment history, at roughly 35% of the model. No other factor comes close, which is why one autopay instruction protects more of your score than any other single action.

What credit utilisation should I aim for?

Under about 30% of your total limit is the widely used healthy zone, measured on the balance reported at statement date. If you regularly cross it, either pay part of the bill before the statement generates or ask for a limit increase you do not intend to use.

Sources

The regulation and official pages this page is checked against. If one of them disagrees with us, it wins.

  1. What is a CIBIL Score β€” TransUnion CIBIL
  2. FAQs β€” Understand Your Credit Score and Report β€” TransUnion CIBIL

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Written and checked by the CardSamajh editorial desk Β· Last reviewed: Β· How we check this

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