How to Improve Your Credit Score for an Instant Personal Loan

Your credit score is crucial in determining your creditworthiness when applying for loans and credit cards. A good credit score can open doors to financial opportunities, including lower interest rates and higher credit limits. On the other hand, a poor credit score can make it challenging to access credit. If you’re seeking an instant personal loan from Kotak Mahindra Bank and want to improve your credit score, this blog will guide you through seven essential steps to enhance your creditworthiness.

Set Reminders or Standing Instructions for Loan EMI Payments

One of the most effective ways to maintain a good credit score is by ensuring you make your loan EMI payments on time. Missing or delaying these payments can negatively impact your credit score. To avoid this, set reminders to repay on time or establish Standing Instructions (SI) with your bank. With SI, a fixed amount will be automatically deducted from your account at regular intervals, typically monthly. This eliminates the risk of missing payments and incurring penalties.

Clear All Credit Card Dues on Time

Credit card dues are another critical factor affecting your credit score when submitting documents for personal loans. Timely repayment of credit card balances is essential to maintain a good credit rating. If you fail to pay your credit card dues by the due date, it will be reflected in your credit report as Days Past Due (DPD), which can significantly harm your credit score.

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Even if you can’t pay the full amount, clear the minimum due to avoid non-payment reporting to the credit bureau. Although interest may accrue on the remaining balance, you will have additional time to settle your dues and prevent a drop in your credit score.

Check for Errors in Your CIBIL Report

Errors in your credit report can impact your credit score negatively, even if you have a strong credit history.


These errors can include incorrect personal information, inaccurate account details, mismatched overdue or paid-off amounts, duplicate accounts, and collateral details discrepancies. To illustrate, an administrative error by a lender may show a loan as “current due” when you have already paid it off and closed the account. Such errors can significantly reduce your credit score. Regularly review your credit report, and if you find any inaccuracies, raise a dispute with the credit bureau. Correcting these errors can lead to a substantial increase in your credit score.

Avoid Multiple Credit Applications in a Short Duration

Each time a lender or credit card provider retrieves your credit report for a credit application, it results in a “hard inquiry.” Occasional hard inquiries have minimal impact on your credit score. However, multiple hard questions in a short period can signal to lenders that you may be in financial difficulty, increasing the risk of credit default. Consequently, this may lead to credit application rejection. Credit bureaus lower the scores of applicants with multiple hard inquiries. Before applying for credit, research, compare options, and apply to only one provider. If your credit score is low, consider improving it before seeking new credit.

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Avail of a Secured Credit Card

If you’ve settled credit accounts or failed to repay on time, it can significantly lower your credit score, making it challenging to access credit products. In such situations, consider applying for a secured credit card from Kotak Mahindra Bank against a fixed deposit. Secured credit card applications do not consider your credit score, making approval easier. Use the card responsibly, make timely payments, and you can begin rebuilding your credit score. While your credit score won’t improve immediately, it’s a step toward better creditworthiness in the long run.

Refrain from Closing Old Credit Card Accounts

Lenders value applicants with a longer credit history and a track record of timely payments. Even if you no longer use an old credit card account, avoid closing it. While it may have a small impact on your credit score, maintaining older accounts can benefit your creditworthiness when lenders evaluate your credit applications in the future.


Improving your credit score is a gradual process, but it’s essential if you’re looking to secure an instant personal loan or access better credit opportunities. By following these seven steps, you can proactively enhance your creditworthiness. From setting reminders for loan EMI payments to avoiding multiple credit applications, these strategies can help you build and maintain a strong credit profile.

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