Having a great CIBIL score is an important step in financial freedom. It lets you​

  • Get education loan for higher studies to improve your earning potential.
  • Get a home loan at cheaper rates, which can possibly shave off a year or two in terms of repayment period!
  • Get personal loan for emergencies
  • Some employers (in the financial industry) even check it before rolling out the offer letter!

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Problem: There are over 500 million smartphone users in India (Sources: McKinsey Global Institute Digital India Report 2019; 2 Kantar i-cube 2020; 3 TechARC Report, Feb 2020). But there are only 73.6 million credit card users as of March 2022. Access to formal credit is often denied to the majority of the population for various reasons. They resort to borrowing from loan sharks, who charge as high as 5% a month! Getting them included in the formal financial system will help them and the country prosper. Access to formal credit often requires payslips, IT returns or a huge bank balance which most lack. How can the average Indian avail loans for emergencies at an interest rate that isn't predatory?

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A friend of mine - Vijay (name changed) doesn't have formal salary slips. He wanted to avail a credit card in 2020, but without a salary slip or ITR returns, most banks wouldn't provide him one. Since, Vijay did not have a CIBIL score, If he wanted to take a housing loan, the interest rate for someone without a CIBIL score would be approx. 0.5% higher than somebody with a CIBIL score above 780.

If Vijay wanted to take a housing loan of 50 lakhs, he would have to pay 3.7 lacs more over the course of a 20-year loan. This amount increases to 6.2 lacs in case of a 30-year loan!

Interest Rate
Lifetime Interest Paid (20 year Loan)
Lifetime Interest Paid (30 year Loan)
Additional Interest Paid


So Vijay got an FD backed credit card in order to generate a CIBIL score for himself. Axis, SBI, BoB, ICICI and Kotak lets you get a credit card against FD without any credit history or salary slip. Vijay took one from ICICI and they let you use up to 90% of the FD limit. The minimum FD amount was ₹10,000 which Vijay paid up and soon enough he got the credit card over post within 7 days.

We signed up for a yearly CIBIL subscription in order to check the results of our experiment. CIBIL scores didn't show up for the first three months.

But after three months...

CIBIL score after 3 months

He now had a CIBIL score of 740 🥳

I also asked him to follow these three rules in order to improve his CIBIL score.

  1. Never spend more than 30% of your credit limit. In case you have to exceed it for some big purchase, bring the outstanding to below 30% as soon as you make the purchase by paying the difference.
  2. Always clear your dues as soon as the statement is generated. Don't wait till the last date to clear the dues and most importantly,
  3. Avoid buying on EMI.

By following the first rule, CIBIL infers that Vijay is always spending within his means. Banks like to lend to people who don't need money desperately. So this will increase his CIBIL score over time.

If you forget to pay within the due date, CIBIL knocks off some points. By paying well within the due date, CIBIL infers that Vijay is a man of his words.

The third rule doesn't affect your CIBIL score directly. But it is better to avoid buying stuff you cant afford. Try going for a recurring deposit (RD) to build a saving habit rather than using an EMI. It often leads to a debt trap and you'll wonder "How the hell did I let this happen?".

Vijay followed the advice and when we checked his CIBIL score in August 2022, we were elated! His score had improved to 774 (See proof below). He was also eligible for instant loan of Rs 3 lacs by CRED and PayTM.

CIBIL score screenshot


  1. If you are in the market for a credit card and don't know which one to pick, I'd refer cardexpert.in. It is run by Siddharth who has covered nearly credit card out there.​