CIBIL and How to Maintain Good Credit Score in India

In today's financial world, your CIBIL score is like your financial Aadhaar—crucial, trackable, and unavoidable. Whether you’re applying for a loan, a credit card, or even a mobile EMI, a good CIBIL score opens doors.

According to TransUnion CIBIL, more than 79% of loans in India are sanctioned to individuals with a credit score above 750. But what if you’re one of the many struggling with a bad credit score?

In this blog, we’ll break down everything you need to know about CIBIL and how to maintain a good credit score, and importantly, what to do when you have a bad credit score.

When Does a Bad Credit Score Arise?

A poor credit score typically results from:

• Missed EMI payments or credit card dues

• Settlements or write-offs reported to bureaus

• High credit utilization (more than 30% of limit)

• Multiple hard inquiries

• Errors in your credit report

Infographic Suggestion: Top 5 Reasons Your CIBIL Score Drops

Legal Rights of Individuals with Bad Credit

Yes, your credit history is important, but you also have legal rights under Indian law:

• Right to accurate reporting: As per RBI guidelines, credit bureaus must reflect correct data.

• Right to dispute errors: You can raise disputes with CIBIL or your lender.

• Right to be informed: Lenders must notify you of loan rejection due to credit score.

• Right to data rectification under The Credit Information Companies (Regulation) Act, 2005.

Infographic Suggestion: Legal Rights Every Indian Borrower Must Know

What Banks & NBFCs Look for in Your CIBIL Report

Here’s what most Indian financial institutions evaluate:

• Repayment history

• Number of settled or written-off accounts

• Credit inquiries (hard pulls)

• Active credit cards or loans

• Credit utilization ratio

Many banks consider scores below 650 as high-risk, limiting credit access. However, institutions also offer credit repair programs, EMI restructuring, or secured credit cards for recovery.

Infographic Suggestion: CIBIL Score Ranges & Their Bank Implications

Step-by-Step: How to Recover from a Bad Credit Score

1. Get Your Credit Report

Visit CIBIL’s official website or use platforms like BankBazaar or PaisaBazaar for a free report.

2. Dispute Errors

If there are incorrect entries, raise a dispute with CIBIL and your bank. They must respond within 30 days.

3. Start Making Timely Payments

Set up auto-debits or reminders. Even 3-6 months of regular payments can boost your score.

4. Lower Your Credit Utilization

Use under 30% of your credit limit. Request a higher credit limit if possible.

5. Avoid New Credit Inquiries

Each hard inquiry can reduce your score. Be selective when applying.

6. Use Secured Credit Cards

These cards are backed by an FD and help rebuild score without risk.

Infographic Suggestion: 6 Steps to Rebuild Your CIBIL Score

Expert Legal Tips for Long-Term CIBIL Management

According to RBI data, over 20% of loan defaults in India are by borrowers under 35—largely due to lack of awareness.

Here’s how to stay ahead:

• Settle dues legally, not through informal means

• Get a “No Dues Certificate” after settlement

• Always take written confirmation of updated status

• Prefer foreclosure over settlement where possible

Infographic Suggestion: 4 Legal Tips to Clean Up Your Credit Report

Alternatives If You Cannot Improve Score Immediately

If your score is still low, consider:

• Loan against gold or FD (no score required)

• Peer-to-peer lending platforms with flexible terms

• Joint loans with family members having good credit

• Using co-branded EMI cards with pre-approved limits

Infographic Suggestion: Smart Credit Alternatives to Traditional Loans

Legal Recovery Starts with Awareness

A bad CIBIL score isn’t the end—it’s the beginning of your financial turnaround. With legal support, informed decisions, and the right strategy, you can restore your credit reputation.

If you're facing challenges with a poor CIBIL score or unresolved disputes, connect with AMA Legal Solutions. Our legal team helps clients with:

• Credit report disputes

• Bank settlements

• Legal notices and representation

Schedule your free consultation today at www.amalegalsolutions.com

Infographic Suggestion: From Bad to Good: CIBIL Score Recovery Timeline