Mistakes that can negatively affect your CIBIL Score

CIBIL score is a measure of your creditworthiness which is represented in a numerical format. It ranges between 300-900 and you should always try to bring your CIBIL score closer to 900. A high CIBIL score will put you in a better position to get a good deal on interest for a loan or while getting a credit card. Most of the lenders like banks and non-banking finance companies (NBFCs) prefer to sanction loans or give credit cards to people with a CIBIL score of 750 or above.

Mistakes that can negatively affect your CIBIL Score
Mistakes that can negatively affect your CIBIL Score

However, a low CIBIL score reduces the chances of getting credit. Hence, you need to use your credit cards wisely to maintain a high CIBIL score. Your CIBIL score is made up of several components and each of these components has a different weighting. Let’s look at them all in detail.

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Components Of CIBIL Score Weightage
Payment History 35%


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Credit Exposure 30%
Length Of Credit History 15%


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Type Of Credit 10%
Credit Inquiries 10%


Not paying bills on time-

Payment history is the most important factor which has a major impact on your CIBIL score. Repayment history is 35% of your CIBIL score. Hence, it is extremely important to pay all your bills or EMIs on time. Delay in payment of bills or late payment of bills can lower your CIBIL score.

To make sure your CIBIL score doesn’t get hit, set reminders on your phone. Another option is to set up an auto-debit facility on the due date to pay your credit card bills. This way, you will not miss any credit card bill payments thereby maintaining your CIBIL score.

Maintaining a high credit utilization ratio-

Credit utilization ratio is the percentage of credit limit that you use over a period of time. If you want to improve your CIBIL score then you should always maintain a low credit utilization ratio. This essentially means that you should not max out your credit card limit and limit your usage.

Many financial experts recommend that consumers use only 30% of their total credit card limit. Your credit exposure is 30% of your CIBIL score. If you have a high credit utilization ratio, it will automatically lower your credit score. Using the full credit card limit indicates that you are not able to pay your bills on time and are unable to handle the credit.

Availing several unsecured loans-

It is important to maintain a balance between the type of loan you have taken. Hence, it is advisable to take both secured and unsecured loans, as it will positively impact your CIBIL score. Multiple unsecured loans tend to lower your CIBIL score while credit options like home loans will help you improve your CIBIL score. The type of credit accounts for 10% of your CIBIL score.

Making multiple credit inquiries-

If you have just started using a credit card, it is better to use the credit cards one by one. Having more than one credit card can be overwhelming as you can lose track of expenses. Also, many credit cards make it difficult to remember the payment due date. Hence, it is ideal not to make multiple credit inquiries at the same time as multiple inquiries can affect your CIBIL score. It also makes your look credit hungry. Credit inquiries are 10% of your total CIBIL score.

Having no or low credit history-

A credit history helps lenders understand how you have handled your credit over the years. Therefore, it is better to have a credit history. The length of credit history is 15% of your CIBIL score.

Not checking your CIBIL report:-

It is important to check your CIBIL report from time to time as it gives you an idea of ​​your current credit status. Also, sometimes errors in your CIBIL report can bring down your CIBIL score. Your CIBIL report contains all your credit details along with your personal information. An error in your credit account or duplication of credit accounts can negatively affect your CIBIL score.

Closing old credit cards-

Your old credit card may have a long credit history that you will lose if you close it. Having a long credit history is important because it gives importance to your credit card or loan application. Therefore, as long as possible, avoid closing old credit cards or credit accounts.

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