Does adding a credit card improve your credit score?

Yes, adding a credit card can improve your credit score over time if managed responsibly. In India, credit bureaus like CIBIL monitor your credit activity. A new card can help by:

• Increasing your total credit limit, which lowers your credit utilization ratio.
• Diversifying your credit mix by adding a revolving credit account.
• Building a positive payment history through consistent on-time repayments.

However, the initial application may cause a temporary dip due to a hard inquiry. Consistent, disciplined use is key to a long-term score boost.