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How to Start Building a Credit History

By Finserv MARKETS - Aug 12,2019
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Improve Your Credit Score

Your credit history is the first thing that banks and non-banking financial companies check before sanctioning you a personal loan. In India, the creditworthiness of an individual is determined based on his/her CIBIL score. Your CIBIL score is a three-digit number that is a reflection of your financial history. A CIBIL score of 700 or above is generally considered a good CIBIL score. However, in order to achieve such high CIBIL score, it is important that you have a good credit history.

Here are some of the effective tips on how to build a strong credit history 

  1. Open a Bank Account
  2. Apply for a Credit Card
  3. Maintain Balance-To-Limit Ratio
  4. Pay your EMIs on time


  1. Open a Bank Account

The first step in building your credit history is to open a bank account. Make sure you have enough credit in your account and are making regular transactions to reflect on your credit history. Ensure that you also maintain a good relationship with the bank over the long-term to reflect well on your credit report.

  1. Apply for a Credit Card

A credit history cannot be built over time. You need to make several financial transactions to build your credit score one by one. The best way to achieve this is by applying for a credit card. The transactions and subsequent payments that you make through your credit card helps build a good credit score. There are two types of credit card that you can apply for-

  1. Unsecured Credit Card
  2. Secured Credit Card

Unsecured Credit Card: For applying for an unsecured credit card, you need not submit any collateral as a form of security. Banks majorly offer unsecured credit cards. At a time when you are just starting to build your credit history, unsecured credit cards are your best option.

Secured Credit Card: Secured credit cards require you to provide a security deposit against the credit limit.

3. Maintain Balance-To-Limit Ratio

The balance-to-limit ratio depends on the credit limit of your credit card and the amount you have spent using the credit card. The credit bureau considers this balance-to-limit ratio to determine your credit score. You can also check CIBIL score for free using our smart financial health check tool. Thus, to ensure that you achieve a good credit score, it is important that you maintain a good balance-to-limit ratio.

4. Pay your EMIs on time

Your debt repayment history is one of the most influential parameters for determining your credit score. Therefore, it is important that you clear your credit card dues on time. The same goes for your Equated Monthly Installments (EMIs) payment. At the time of availing any loan, the EMI amount and the frequency of your installment is determined. In order to reflect well on your credit history, you must ensure that you do not default on any of your EMI payments.

To make sure that your EMI payments do not prove to be a burden, compare all the personal loan options in the market and choose only the most affordable interest rates and easy repayment options. For instance, the Bajaj Finserv personal loan comes at affordable interest rates and zero collateral facility. Apply now for a personal loan at Finserv MARKETS and start building a good credit history right away!

Bajaj Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!


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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522