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Factors that affect CIBIL score in India

Your credit risk is indicated by your CIBIL score, which assists lenders in deciding whether or not to grant you credit cards, loans and other financial loan benefits, synchronous to various factors that affect your rating. With a good score, you might find it simpler to secure a loan or allow financiers to make appropriate decisions regarding your credit application.

Constituents That Affect Your CIBIL Score

Having a high CIBIL score can benefit you in many ways. However, it would mean constantly checking the following factors companies use to determine your creditworthiness. 

Payment History

If your payment history is impeccable, you are a responsible paymaster. This assures the lender that the borrower is creditworthy and sets the scene for better loan terms and interest rates. Any loan and credit card defaults can affect your CIBIL score. Check the frequency of unpaid bills or evaluate the duration of outstanding. 

Any late or missed payments have a negative impact on your score and give the impression that you are inconsistent in repaying credit. According to CIBIL, a 30-day delay can lower the score by 100 points. It is advisable to set up reminders and notifications if you have several credit cards and loans so that you don’t miss or delay payments.

Only Minimum Amount Due

A minimum amount due is a minimal amount of the monthly principal owed. If you consistently pay only the minimum amount due, you risk falling into a debt trap. The interest on your outstanding balance will compound if you roll over the loan by making only the minimum payment. So, it is recommended that you pay off all of your credit card debt. 

Credit Utilisation Ratio

It is the credit amount used in relation to your available credit limit. Experts recommend limiting your use to no more than 30% of your credit limit. For instance, if your credit card has a limit of Rs. 2 lakhs, spend Rs. 80,000. Your credit score will be affected if you have utilised more than 40% of your credit limit. If you have a high credit exposure, lenders will be alert. Maxing out your credit cards results in a high credit utilisation ratio, which frequently lowers your credit score.

Credit Mix

You must maintain a healthy ratio of secured and unsecure loans. Examples of secure loans include mortgages and vehicle loans, whereas an unsecure loan is a credit card. Your CIBIL score may be negatively impacted if you have only one type of credit. A balance mix of loan forms indicates you have experience managing both types of loans. Lenders consider this desirable.


Your CIBIL report contains a thorough history of your current and past credit accounts. Your score may suffer if your report contains any mistakes. Therefore, if you have errors in your information, correct them by filing an application with the CIBIL office. Additionally, reviewing your credit report periodically might assist you in determining whether you are a victim of identity theft.

Old Credit Card Accounts

Old credit card accounts should be close – this activity helps establish your credit position. When closing an old account, you lose its credit history, too. Therefore, keeping the card open for a significant amount of time is advise. A new card with no transactions may be close without any impact on the CIBIL score. Keeping your oldest account open benefits your score because it can increase if the average age of your accounts is high.

Credit Card Applications

You need to have a CIBIL score login ID to be eligible to avail a credit card. Lenders will obtain your credit record to determine your solvency when you apply for a credit card.  Numerous credit inquiries take place at the same time if you submit multiple applications, which leads to a decrease in your credit scores.


Check your CIBIL score periodically, especially against the above mention factors. CIBIL provides you with one free credit report per calendar year. Over time, you can raise your credit score. To qualify for a credit, however, you need to maintain good credit conduct. Most importantly be wary of your payment history, credit utilisation and the credit mix that you apply to monitor and maintain a good financial performance.


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