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Credit score is an important factor that helps in making decisions for the banks that provide us credit facility. CIBIL is one of the leading credit score providers in India that helps in understanding the factors affecting CIBIL score.
Your CIBIL credit score is helpful in evaluating your creditworthiness. If you haven’t paid the bills on time, it affects your credit score. Here are some surprising things that could alter your credit report.
There are few things that are known to hurt your credit score. Here are some of them that you need to focus on.
1. Cut down on the number of your credit cards:
Applying for a credit card is what cuts down your score. It is also noted that if you apply for a card, it is known as a hard enquiry. So cutting down on your cards will affect your credit score. The more number of cards you have inquired for, the more number of inquiries are added to your name or account. Therefore, you need to keep a check on the number of new credit cards you have taken so that your credit score does not come down.
2. Do Not Increase Your Credit Limit:
If you increase your credit limit, it results in increasing your hard enquiries; this will again lead to a decrease in your credit limit. Unless it is very much needed, do not request for an increase in your credit limit as it will have an adverse impact on your CIBIL Score. It is better to have a proper credit limit that will help you in maintaining a positive credit score.
3. Be Extra Cautious While Using Credit Cards:
If you have taken precautions while using your credit cards, you can prevent the negative effect on your CIBIL Score. Using your credit cards in a proper way will help you in maintaining a positive credit score.
Maintaining caution while using credit cards will help in improving your credit score. A borrower who has behaved in a cautious way while making use of their credit cards will always have a good credit score.
4. Tenure of the Loan:
This is another factor that affects the CIBIL Score. If you have been repaying all your loans on time, you will see a positive impact on your credit score. If you have made a prepayment of the loan or you have closed your loan completely, you will see that there is an impact on your credit score. The tenure of the loan you have taken also matters when it comes to the credit score.
5. Check Your Credit Report:
It is advisable to keep a check on the on your credit report on a frequent basis. Having checked it regularly will help you in avoiding mistakes on your credit report. Checking your credit report will help you in making note of the points that are causing a negative impact on your credit score. It will not only help you in maintaining a good credit score, but also keep on improving it for a better financial future
6. No Loans:
If have no loans history, you will have an effect on your CIBIL Score. Having no loans history will have an impact on the credit. If you have not taken any loans previously, you will not have any loan history. This will be reflected on your credit report as well as your credit score.
7. Minimize Your Search Enquiries:
The more enquiries you make regarding loans, the more it affects your credit score. Number of Credit enquiries is directly related to CIBIL Score. If you have made many enquiries within a short span of time, you will surely see its affect on your CIBIL Score.
8. Loan proportion and Type:
The proportion of loan you have chosen also matters. If you a proper mix of your loan and their different types, the effect of it on your CIBIL Score is in your favor. The proper combination of the types of loans you have taken will decide on the credit score that will be allotted to you. Your credit score will get impacted adversely if you have not been able to maintain the proper proportions of the loan you have applied for.
9. Default on Payments:
If you have defaulted on your bill payments your CIBIL Score will get affected negatively. So it is advisable to never default on your payments. If you are forgetful person, you can set a reminder for making your bill payments on time.
10. Paying Your Credit Card Bills on Time:
Doing this will certainly help you in ascertaining the factors that will cause a negative impact on your credit score. If you paid your credit card bills on time, you will have a good credit score and if you are late in making the bill payment, you will come under the category of those who have a bad credit score.
11. Repayment History:
If you have been maintaining a proper repayment record, you will be the one among those who have a good credit score. If you have not made your repayments on time, you will be the one who will have a bad credit score and it will be difficult for you to take new loan in future.
12. Credit Hungry Behaviour:
Behaving in a credit hungry manner will also have an impact on your credit score. So it is advisable not to behave in a credit hungry manner if you are willing to maintain a good credit score.
As you are now aware of the points that are considered while calculating your credit score, it is advisable that you keep monitoring these factors and maintain a good credit score. This you can do by analyzing the complexities and importance of each of these factors and implementing the right strategies. This way you will able to comprehend what is right and what is wrong with respect to your credit report as well as credit score. With Creditseva, you will be able to make hassle free loan payments and improve your credit score in an easy and appropriate manner.
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