5 biggest reasons for deteriorating CIBIL score: Avoid these mistakes or else you will face trouble

5 biggest reasons for deteriorating CIBIL score: Avoid these mistakes or else you will face trouble

CIBIL score reflects the credit health of any person and decides whether you will get loan or credit card facility from the bank or not. If your CIBIL score is bad, then in future you may face problems in loan approval. Therefore, it is very important to keep it better.

Today we will tell you about the 5 biggest mistakes, which can directly harm your CIBIL score. If you avoid these, then your credit score will remain strong.

1. Not paying EMI and bill on time

 How does it affect?

If you do not pay loan EMI or credit card bill on time, it spoils your payment history.

Every late payment lowers the CIBIL score and makes it difficult to get a loan in future.

 How to avoid?

Keep your credit card and EMI payment in auto-deduct mode.

Set a reminder to remember the date and pay on time.

2. Misuse of credit card

 How does it affect?

Spending more than the credit card limit increases your credit utilization ratio.

The CIBIL score is good only when your expenditure is less than 30% of the credit limit.

 How to avoid?

Do not use more than 30% of the credit card.

Make it a habit to pay the full bill every month, making the minimum payment increases the interest.

3. Applying for a credit card repeatedly
   

 How does it affect?

By applying for a credit card repeatedly, the bank does a hard inquiry, which can reduce your score.

Suddenly closing the credit card also increases your credit utilization ratio, which can drop the CIBIL score.

How to avoid?

Apply for a credit card only as per your need after careful consideration.

Do not close the old credit card immediately, as this may affect your credit history.

4. Applying for a loan repeatedly
   

 How does it affect?

Every time you apply for a loan, the bank checks the CIBIL score.

Too many hard inquiries bring down the score and reduce the chances of getting a loan.

How to avoid?

Do not apply for a loan repeatedly, take a loan only when needed.

Assess your income and expenses correctly, so that there is no need to take a loan repeatedly.

5. Taking too many loans at once
   

 How does it affect?

Taking different loans increases your financial liability.

If you are unable to repay all the loan EMIs on time, then the CIBIL score is negatively affected.

 How to avoid?

Take only as much loan as you can easily repay.

Avoid taking multiple loans at the same time, this will not increase your financial pressure.

Conclusion: Easy tips to improve CIBIL score

Pay all EMIs and credit card bills on time.

Use less than 30% of the credit card limit.

Do not apply for credit cards and loans repeatedly.

Avoid taking too many loans at once.

Maintain your credit history, do not close old credit lines immediately.

If you avoid these mistakes, your CIBIL score will remain strong and it will be easy to get a loan or credit card in the future.

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