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How to Improve Your Credit Score before Buying an Apartment?
June 12, 2025
Buying an apartment is a major financial milestone, and for most people, it involves applying for a home loan or mortgage. One of the key factors lenders evaluate is your credit score—a number that reflects your creditworthiness based on your borrowing history.
A good credit score can help you get loan approvals faster, secure better interest rates, and even increase your chances of negotiating favourable terms. If you’re planning to buy an apartment, it’s wise to take steps to improve your credit score beforehand.
Here are five practical ways to do just that:
1. Check Your Credit Report
The first step to improving your credit score is knowing where you stand. Request a copy of your credit report from credit bureaus such as CIBIL. Review it carefully to identify any errors, such as incorrect account details, outdated information, or fraudulent activities.
Even small mistakes can negatively affect your score. If you spot any inaccuracies, raise a dispute with the bureau and have them corrected. A clean and accurate credit report lays the foundation for a strong credit score.
2. Pay down Outstanding Debts
One of the biggest factors influencing your credit score is your debt-to-credit ratio, also known as credit utilization. If you're using a large portion of your available credit, it signals to lenders that you may be financially stretched.
Start by paying off high-interest debts first, such as credit card balances or personal loans. Reducing the total amount you owe improves your credit utilization ratio and reflects positively on your score. The lower your debt, the better your chances of getting loan approval with favourable terms.
3. Make Timely Payments
Your payment history has a major impact on your credit score. Late or missed payments on loans, credit cards, or even utility bills can damage your credit profile.
Make it a habit to pay your bills on or before the due date every month. Set reminders or automate your payments to avoid missing deadlines. Even a single missed payment can stay on your credit report for years, so consistency is key. Timely payments not only improve your score but also show lenders that you’re a responsible borrower.
4. Monitor Your Credit Regularly
Keeping track of your credit report regularly helps you stay on top of any changes, mistakes, or suspicious activity. Many financial institutions and apps now offer free credit score tracking tools. Use them to monitor your progress and identify any red flags early on.
If you see sudden dips in your credit score, investigate the cause. It could be due to a missed payment, a hard inquiry, or an error in the report. Regular monitoring allows you to take corrective action quickly and maintain control over your financial reputation.
5. Avoid Opening New Credit Accounts
While it may be tempting to apply for a new credit card or personal loan before purchasing an apartment, doing so can actually harm your credit score in the short term. Each time you apply for credit, a “hard inquiry” is made on your report, which can slightly lower your score.
Additionally, new credit accounts reduce the average age of your credit history—a factor that lenders consider when evaluating creditworthiness. It's best to avoid taking on new debt or credit lines when you're preparing to buy property.