CIBIL: If you miss even a single EMI installment, how much will your CIBIL score fall? Know here..

CIBIL score: Home loan, car loan, personal loan, or credit card... Today, most of us rely on EMI to fulfill our needs. Every month on a fixed date, the installment is deducted from our account. But imagine, what if due to a shortage of money in a month, you forget to pay the EMI or are unable to pay it?

Bank penalties and late fees are charged, but the biggest loss is to your credit score. This is your 'financial report card', which decides whether you will get a loan in the future or not, and if yes, then at what interest rate. A bad credit score can close all the doors related to money for you in the future.

So the biggest question is, by how many points does your credit score fall if you miss an EMI? Do 1 1-day delay and 30 30-day delay have the same effect? ​​Come, let us explain its entire mathematics to you in simple language today.

After all, how many points fall?

This is the first question that comes to everyone's mind. But the answer is not a straight "50 points" or "100 points". How much the credit score will fall depends on many things. No bank or credit bureau (like CIBIL, Experian) can tell you a fixed number because their algorithm looks at many factors simultaneously:

Your current score:
If your score is very good (like 800+), then even a small mistake will have a big impact on it, and the score will fall more. On the other hand, if your score is already low (like 650), then the fall can be a little less.

How many days is the delay?
There is a huge difference between a delay of 10 days and a delay of 90 days.

Type of loan:
Missing an EMI of an unsecured loan (personal loan, credit card) has a worse impact than a secured loan (home loan, car loan).

Your credit history:
Is this your first mistake, or do you do this often? If it is the first time, the impact will be less. But if you are a habitual defaulter, the score will fall very fast.

The game of delay: What do 30, 60, and 90 days mean?
Credit bureaus track your delay in terms of days, which is called DPD (Days Past Due). This means how many days you are late for your due date.

1. Grace period (1-2 days delay after due date)

If you make a payment 1-2 days after the due date, then there is no need to panic. Usually, banks do not report it to the credit bureaus. Yes, you may have to pay a late payment fee to the bank, but it will not affect your credit score.

2. 30 days delay (DPD 30): The first big blow!

As soon as you delay paying your EMI by more than 30 days, the bank considers it a 'default' and reports it to the credit bureau. This is the first big red flag on your credit report. This one mistake can drop your score by 50 to 100 points. This drop will depend on your existing score and other factors.

3. 60 days delay (DPD 60): Alarm bells

When you do not pay EMI for two months in a row and your delay crosses 60 days, the situation becomes even more serious. This shows that you are in serious financial trouble, and it has a very bad impact on your credit report. A delay of 60 days can drop your score by 80 to 150 points or even more.

4. 90 days delay (DPD 90): The most dangerous situation!

If your EMI delay becomes 90 days or more, then this is the most dangerous situation. The bank can put this loan in the category of 'Non-Performing Asset' (NPA). In simple language, the bank assumes that this loan is now bad and there is very little chance of its recovery. This can ruin your credit report for years. A delay of 90 days can drop your score by 100 to 200+ points, which can put your score in the category of 'bad' or 'very bad'.

What will happen if you miss more than one EMI?

Each missed EMI is counted as a separate negative event in your credit report. If you miss the EMI of both a home loan and a personal loan in the same month, then your score will be hit twice. The more EMIs you miss, the faster your score will fall and the more difficult it will be to improve it.

How will the spoiled CIBIL improve?

If you have made a mistake and your score has fallen, do not panic. You can improve it, it will just take some time and discipline.

Pay the dues immediately:
The first thing to do is to pay all the EMIs and penalties due immediately.

Automate payments:
To avoid such mistakes in future, start auto-debit facility in your bank account.

Be patient:
Do not apply for a new loan or credit card immediately after your score drops. This will further lower your score.

Check your report regularly:
Check your credit report for free every 3-4 months so that you know what your status is.

Don't make any mistakes again:
Pay all your EMIs and bills on time for the next 6-12 months. Your good behaviour will gradually bring your score back up.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.