A credit score is a score that ranges from 300–to 850 that depicts a person or individual creditworthiness(it means an individual’s ability to repay the borrowed amount). A credit score is based on factors:

• Payment history
• Total amount owed
• Length of credit history
• Types of credit
• New credit 

 ROLE OF CREDIT SCORE IN INDIA:

In India, there are four credit information companies licensed by Reserve Bank of India:

• The Credit Information Bureau (India) Limited (CIBIL)
•  Experian
•  Equifax
•  CRIF High Mark

Transunion bought CIBIL.

Although all four credit information companies have developed their individual credit scores, the most popular is the CIBIL credit score. The CIBIL credit score is a three-digit number that represents a summary of individuals’ credit history and credit rating. This score ranges from 300 to 900, with 900 being the best score. Individuals with no credit history will have a score of −1. If the credit history is less than six months, the score will be 0. A CIBIL credit score takes time to build up and usually, it takes between 18 and 36 months or more of credit usage to obtain a satisfactory credit score.

• Excellent: 800 to 850
• Very Good: 740 to 799
• Good: 670 to 739
• Fair: 580 to 669
• Poor: 300 to 579

How to Improve Your Credit Score:

When information is updated on a borrower’s credit report, their credit score changes and can rise or fall based on new information.

• Review Your Credit Reports
• Pay your bills on time
• Up your credit line: If you have credit card accounts, call and inquire about a credit increase. If your account is in good standing, you should be granted an increase in your credit limit

·      Aim for 30% Credit Utilization or Less

·      Limits Your Requests for New Credit—and the Hard Inquiries with Them

·      Use Credit Monitoring to Track Your Progress

IN SHORT:

Improving your credit score is a good goal to have, especially if you’re planning to either apply for a loan to make a major purchase. It can take several weeks, and sometimes several months, to see a noticeable impact on your score when you start taking steps to turn it around. An excellent score can land you lower interest rates, meaning you will pay less for any line of credit you take out.