5 Different Ways to Hurt Your CIBIL Score and How to Avoid Them

Hurting your CIBIL score to tank it down is very easy in comparison to moving it up. A credit score is a 3-digit number, which ranges between 300-900, linked to a PAN card resembling a person’s creditworthiness. When this score is extracted with the help of CIBIL, a top credit bureau agency, then it’s called CIBIL Score.

So, if your credit score is going down then your creditworthiness in the eyes of lenders also goes down. You will have to maintain your credit score to close to 900 if you want to avail the best credit facilities from the major lenders in India. Thus, with the aim to help you increase your CIBIL score, we are highlighting some of the very common mistakes you do to hurt your credit score.

5 Different Ways to Hurt Your CIBIL Score and How to Avoid Them

List of 5 Different Ways You Hurt Your CIBIL Score:

1. Missing Payments or Delaying Them

Payment history is a section in your CIBIL report which describes the total number of loan payments you have made to date and how many of them are on time or delayed or missed. Furthermore, the delayed or missed payments will have a significant breakdown on your CIBIL score and when a lender will access your report, they will see your messed up credit history.

So, pay your monthly on time and do not let your payments be pending until the last date. Do not pay your bill partially and always make payments in full. Because paying partially can make you look bad in front of lenders as it decreases your loan repaying capacity.

2. Using Full Credit Limit

The most unknowingly committed mistake which deteriorates your CIBIL score is using the full or more than 50 per cent of your credit limit. Whether you have a BNPL account, Credit Card or a Post-paid account, you should not spend more than 30 per cent of your credit limit.

The reason for using only this much credit limit is that the lender might see you as completely dependent on loaned money. It decreases your value as a worthy customer.

3. Raising Multiple Credit Queries in a Short Time

Each time you apply for a loan or credit card, the lender checks your credit record by contacting any one of the few credit bureaus in India. This type of query from the lender will be recorded as a hard query on your credit report. And each hard query causes your CIBIL score to go down by 10-15 points. Furthermore, these hard queries take at least 2 years to disappear from your credit report.

Also read:

Unique Facts About CIBIL Score You Didn’t Know About

4. Closing Old Credit Account

Credit history is the biggest contributor to increasing your CIBIL score and it’s based on the age of your credit accounts. So, the more the age of your credit account is the more beneficial it is for you.

5. Not Checking CIBIL Score Periodically

Your credit report contains all the records of your credit history. Every financial move you make towards your loan or credit account affects your CIBIL score. And remember your credit score is highly sensitive, it keeps changing and never being stable. So, you should keep track of your credit score and check your credit report regularly.

Rishabh Sharma

Rishabh is an experienced content writer and editor, he is working for Viralbake to cover a diversified range of categories. His articles mainly focus on providing information, being a travel guide, educating others, and also making people aware of technology, after all, he is a technophile. When not writing he can be found gaming, watching movies, and travelling.

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