CIBIL is currently very popular in the Indian market that provides your Credit Score which is very helpful in getting essential loans like home equity loans, automobile loans, and personal or business loans.
CIBIL uses some unique but scientific methodologies to calculate your credit score which is accepted by almost every finance company in India. Your chances of getting a loan increase if you bought a high CIBIL score.
The actual fact that the CIBIL credit score is calculated on the idea of some scientific methodologies, you will get a positively high score or negatively low score based on your financial profile. Hence, the factors determining the CIBIL credit score are n't based on your repaying capability alone. In this blog, we'll guide you through the negative factors that affect your CIBIL credit score.
Negative Factors affecting your Credit Score:
Defaults in Repayments:
The most important factor for a low credit score is your repayment history. If you have got any delayed or incomprehensible EMIs on any of your existing loans within the few years, then your credit score is likely to go down as such irregularity suggests that you are financially unstable and incapable of servicing your existing commitments.
Full utilization of your Credit Limits:
Your credit limits on your credit card also affect your CIBIL credit score. If you reach the credit limit on your credit card quite often then it is an indication that you are committed to high repayment responsibilities which in return affects your credit score negatively. On the contrary, lower outstanding credit balances on your credit card statements will improve the score.
Owning too many Credits Cards or Personal Loans:
Owning too many credit cards can make you popular among your friend circle but the same is not the case with CIBIL credit score. Too several credit cards suggest that you require a lot of credits and are always burdened with the responsibility to repay the debts acquired from those credit cards. Similarly, too many personal or unsecured loans. Always remember that, as the responsibilities of repaying your debt rises, your credit score goes down.
Are you Credit Hungry?
If you're in urgent need of money most of the time, then you can be classified as Credit Hungry. To satisfy this hunger, you would apply to a number of new credit facilities dealing with a large number of lenders and end up getting a very low credit score. Such practice would caution the lenders in the future while evaluating your profile before sanctioning the loan.
So, above are the 4 important factors that you must consider if you want to restrict these negative factors hurting your CIBIL Credit Score. Good Luck.
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