I took two loans to increase my CIBIL score and closed them within 6 months. My CIBIL score has dropped by 24 points from 761 because I closed two loan accounts within 6 months. What should I do now to increase my points?

Ans: Understanding Your Current CIBIL Drop

Your CIBIL score was 761 earlier.

You took two loans to improve it.

Closed both within 6 months.

Now, your score has dropped by 24 points.

You are concerned why this happened.

How Short-Term Loans Affected Your Score

Loan closure too early signals credit instability.

CIBIL expects longer loan tenures for score strength.

Closing quickly reduces credit age.

It hurts your score more than helping.

Loan repayment history was too short to build credit.

What CIBIL Score Really Measures

It checks repayment behaviour.

Considers credit mix and utilisation.

Monitors credit history length.

Short loans give limited data to CIBIL.

It prefers consistent repayment over time.

Steps to Rebuild Your CIBIL Score Slowly

Do not take new loans now.

Focus on credit card discipline.

Maintain low credit usage, under 30% of limit.

Pay full dues on or before due date.

Set up auto-debit for EMIs or card dues.

If You Don’t Have a Credit Card, Get One

Get a secured credit card if score is low.

Use for small purchases.

Repay full amount each month.

After 6–9 months, score will improve.

Do not apply for multiple cards.

Avoid Frequent Loan Applications

Multiple enquiries lower your score.

CIBIL flags you as “credit hungry”.

Don’t fall for personal loan offers easily.

Wait 6–9 months before fresh credit moves.

Let the Credit Age Grow

Credit age is an important factor.

Older accounts help score grow.

Never close old credit cards.

Even unused ones with zero fee are useful.

Check CIBIL Report for Errors

Download detailed CIBIL report from official site.

Check if loans are correctly reported as closed.

See if any delayed EMI or missed payment shown.

If any issue, raise dispute with CIBIL.

Build Credit Mix Carefully

Credit mix means types of credit used.

A good mix has both secured and unsecured loans.

But don’t take loan just to create a mix.

Keep your financial health more important.

Avoid These Mistakes Going Forward

Don’t close loans early without purpose.

Don’t take loans just to increase score.

Don’t miss EMI dates.

Don’t carry credit card balance forward.

Don’t max out your cards.

CIBIL Score Growth is Slow but Steady

Credit score takes time to build.

Don’t expect changes every month.

Track every quarter only.

Do not panic with 20–30 points movement.

Focus on long-term responsible behaviour.

Why Credit Score Matters Later

Better score helps in home or car loans.

You get lower interest rates.

Also helps for higher credit card limits.

Employers and landlords may check score.

Maintain 750+ for best benefits.

If You Used Direct Loans or Cards Without Guidance

Direct approach lacks credit strategy.

Always work with a Certified Financial Planner.

CFP helps manage credit and investments together.

You can align credit behaviour to long-term goals.

Rebuild With Long-Term Financial Health

Don’t chase score only.

Build savings alongside credit history.

Have Rs 1–2 lakh emergency fund.

Start SIP in mutual funds monthly.

Use 50:30:20 budget rule.

Finally

Your CIBIL score drop is temporary.

It happened due to early closure of loans.

CIBIL expects long-term repayment track.

Don’t take loans for scoring purpose again.

Instead, use credit card wisely and repay fully.

Check report, avoid new enquiries, and be patient.

You will regain score in 6–12 months steadily.

Consult a Certified Financial Planner for overall money planning.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment