- HOW IT WORKS?
- Credit Score & Report
- Credit Bureaus
CIBIL was founded in the year 2000. It is the abbreviation for Credit Information Bureau of India Limited and is known to maintain the record of the loans and credit card of individuals. CIBIL score can be simply explained as one of the important parameters that measure the ability of an individual to repay a loan.
Does missing a Payment affect CIBIL Score?
Yes, it is true that missing a payment will definitely affect the CIBIL Score. Therefore it is to be noted that if you have missed a payment, you will see that it affects your CIBIL Score to a larger extent. Now it has to be understood that every payment that is missed will affect your credit score or not?
Consequences of Missing a Payment
These are the few things that would get affected if you have missed one payment. If you have missed your payments, you can see that there is an adverse impact on the following things.
1. Your CIBIL Score gets reduced: If you have missed one payment, it will relatively affect your Credit Score.
2. Negative remarks on your credit report: There will be a negative impact on your credit report if you miss one of your payments
3. Loan application rejected: If you are one among those who have missed their payments, you will find that it has reflected your loan application.
Maintain Financial Discipline
It is often seen that timely payments are very important for a good CIBIL Score. Therefore, it is necessary that you maintain discipline while making the financial transactions so that your credit score does not get affected in a negative way. Maintaining a proper financial discipline will help you in avoiding those factors that affect your credit score in a negative way.
Effect of delayed payments on Credit Rating
If you have missed making a payment your credit score will reduce and you will also see that there is the decrease in your creditworthiness. In this case, the lending authorities will review your profile carefully and also reject your loan requests. This will, in turn, affect your CIBIL Score and credit rating. If you do not want to see your credit rating getting deteriorated, you should focus on not missing any payments that you are ought to make.
- Minor Defaults:
Minor defaults relate to those defaults that have occurred for a shorter duration. Minor defaults will not have much impact on your credit score. They have a temporary effect on your credit score which will not affect you in the long term.
Ex: You have delayed a payment for a span of 90 days.
- Major Defaults:
These defaults are the ones that have occurred for a longer duration. Major defaults are bound to have a greater impact on the credit score of an individual. These do not have a temporary effect on the credit score. Instead, they are known to have a larger impact on the credit score.
Ex: You have not paid your credit card bill for 150 or 180 days.
- Myth Vs Reality:
There are some myths about the single payments that have been missed. Though these myths are not true, it is important to make the lenders understand that these are myths and not the facts. However, the reality is much different.
There is usually a myth that missing one payment will not affect the CIBIL Score. The reality is that missing one payment also will affect your CIBIL Score to a great extent. If you have missed one payment and you are applying for a new loan, then there are chances that your loan request will not be approved.
- Affect on Your Credit Rating:
Missing a payment closely affects your credit rating also. So it is to be checked every month that you have not missed on any payments that you are ought to pay on a regular basis. Your credit rating will get monitored if you have failed making a payment that you had to make.
- Checking Your CIBIL Report:
If you have closed any account, you have to cross check that this information has been forwarded to CIBIL and also reflected in the credit report. If this has not happened, you will see that there is a negative impact on your CIBIL Score. Apart from this, it is good to keep a check on the credit report as it helps in understanding those factors that will increase or decrease your credit report and credit score.
Missing a Payment Due to Financial Emergency
It is to be noted that missing a payment due to a financial burden or emergency, will also have an impact on your credit score. It so happens that sometimes you miss a payment due to a financial emergency situation that you have been facing. In such a case, your defaulted record gets tracked by the credit bureaus and gets recorded in their data. If you have failed to make a payment for one month and made the payment in the second month, then you will find that this data has been sent to the credit bureaus by the lending authorities.
Timing of Missed Payment
The payment that you have missed will affect your Credit Score if it has been delayed to a larger extent. If it is a minor default, it will affect the credit score on a temporary basis and if it is a major default, it will affect the credit score to a great extent. The timing of the payment that is missed is nothing but how recently you have been missing the payments. The timing of the payment also relates to the frequency of the payments that you have been missing. If you have been missing your payments regularly, you will be one among those who are defaulters.
As it has been observed that missing a single payment also affects CIBIL Score, an individual needs to take extra precautions in maintaining a proper credit score. The basic step to make sure that any of your payments have not missed is that you keep a track of all the payments you need to make on a regular basis.
This way you will be able to maintain a good record of repayment and also focus on attaining a good credit score. Creditseva will provide your assistance in gaining knowledge about your credit score and also avoid a lower credit score so that you are not in the bad books of the lender.
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