Sometimes, but they are one of the costliest and riskiest ways to do it. A small loan from a regulated lender, repaid on time, does add positive history to your credit report. But only loans from banks and RBI-registered NBFCs reach the bureaus, each application adds a hard enquiry, and a string of short loans can read as regular cash shortage. One late repayment on a ₹5,000 loan hurts as much as on a big one. A card from your salary bank or a secured card, used lightly and paid in full, builds the same history for far less.
Written by the Omozing Credit Team · Reviewed for accuracy by our credit and compliance team · Updated October 2026
See it play out: Sneha asks Meera from our credit team
An illustrative conversation. Sneha is a made-up borrower, not a real customer. Meera speaks for the Omozing credit team.
S
SnehaA friend said I should take small loans on apps and repay them quickly to build my CIBIL. I’m thinking five or six ₹5,000 loans this year. Good plan?
M
MeeraIt can add history, but it’s an expensive way to do it, and it can backfire. First question: does the app tell you which lender actually gives you the money?
S
SnehaIt says “lending partner” somewhere. I didn’t check who.
M
MeeraCheck before anything else. Only banks and RBI-registered NBFCs report to the credit bureaus. If there’s no regulated lender behind the app, your on-time repayments never reach your report, and you’ve paid fees for nothing. The Key Fact Statement should name the lender.
S
SnehaSay it is a real NBFC. Then six loans repaid on time means six good entries, right?
M
MeeraSix accounts and six hard enquiries. A lender reading your report sees someone borrowing a small sum every couple of months. Paid on time, yes, but it can look like you regularly run short before payday.
S
SnehaAnd what does it cost me?
M
MeeraAs an illustration: a ₹5,000, 30-day loan with a 10% fee and 1% a day interest costs ₹2,000. Six of those is ₹12,000 in a year, just to build a score.
S
SnehaThat’s more than I thought. What would you do instead?
M
MeeraAsk your salary bank for a card, or get a secured card against a small fixed deposit. Put a few regular bills on it, keep use low and pay the full statement every month. That’s twelve on-time months and no interest.
S
SnehaAnd if I genuinely need ₹5,000 next month?
M
MeeraThen borrow once from a regulated lender, read the KFS, repay on time and stop there. Never take a new app loan to repay an old one. That is how a small need turns into five loans.
What each approach puts on your report
Twelve months, two ways to build history (illustrative)
Illustrative. App-loan cost assumes six ₹5,000 loans for 30 days each with a 10% fee and 1% a day interest (₹500 + ₹1,500 = ₹2,000 per loan). Real terms vary; the APR is in each lender’s Key Fact Statement.
What most people get wrong: they think a small loan carries small risk for their score. The bureau records days past due, not the size of the loan. A ₹3,000 app loan that goes 30 days overdue leaves the same kind of late mark as a missed EMI on a ₹3 lakh loan. What an unpaid app loan does.
If you do use an app loan
Confirm the lender is a bank or RBI-registered NBFC and is named in the Key Fact Statement. The money should come from, and go back to, the lender directly.
Read the APR, not the “small daily fee”. A 30-day loan with a fee can cost far more than it looks once annualised.
Take one at a time. Never borrow from a new app to repay an old one.
Repay on or before the due date and keep the no-dues confirmation.
Walk away from any app that wants access to your contacts or photos, or threatens you. How to spot illegal apps.
Already juggling several app loans? Replacing them with one EMI from a single lender stops the rollovers and gives you one clean account to repay. See how SmartSwitch works, and read our guide on building a score from scratch for better first products.
Stuck in a cycle of small app loans?
SmartSwitch consolidates several loan-app loans into one Omozing loan with one EMI, paid into your own account.
Aarav vs Priya: Tap through a year of two borrowers with the same salary and very different habits. Salary Day game: Split your salary, survive a month of surprises and see where the money goes.
Apps backed by a bank or RBI-registered NBFC usually report through that lender. Apps with no regulated lender behind them don’t report, so they can’t build your score.
Will one small loan repaid on time improve my score?
It adds a positive account to your report, which helps most when your history is thin. On its own, one 30-day loan is a small entry; steady on-time payments over many months matter more.
Do many small loans look bad to lenders?
Often, yes. Repeated short loans and enquiries can suggest regular cash shortages, even if every one was repaid on time.
What is a cheaper way to build credit than app loans?
A card from your salary bank or a secured card against a fixed deposit, used lightly and paid in full every month, builds history without interest.
Does BNPL build a credit score?
Pay-later from a regulated lender is a credit facility and is usually reported to bureaus, so it can help or hurt like any loan. Check the lender’s terms.
Omozing is the digital lending brand of Aparampaar Finance Private Limited, an RBI-registered non-deposit-taking NBFC. Loans are subject to credit assessment. See our regulatory disclosures and grievance redressal process.
