Cibil Score: Does using multiple credit cards increase or decrease your Cibil score? Learn the truth...

More people in India than ever before are using credit cards to meet everyday expenses. According to a recent report, approximately 42% of card users spent more than ₹50,000 during the festive season. This leaves many wondering whether having multiple credit cards is beneficial or negatively impacts their credit score or CIBIL score.

Benefits: How it can boost your credit score
If used wisely, multiple credit cards can improve your credit score.

Low Credit Utilization Ratio: The most important factor in determining your credit score is your credit utilization ratio (CUR), which is how much of your available credit limit you have utilized. A higher total limit and limited spending lower your utilization ratio, leading to a better score.

Good Credit Mix: Using different cards for different needs (such as shopping, travel, fuel) reflects financial discipline.

Strong repayment history: Paying installments on every card on time increases your financial credibility.

Disadvantages: Negligence can cause a score drop.
Missing a payment on even one card can severely impact your score. Applying for multiple cards in a short period of time increases hard checks and lowers your average credit age. High spending, or using close to your limit, indicates a high level of debt. Closing old cards can reduce your total limit and credit history.

How to manage multiple credit cards:
Use no more than 30% of your total credit limit, make all payments on time, keep your old cards active, and don't rush into the new application process. Also, check your credit report regularly and consult a financial advisor if necessary.

Disclaimer: This content has been sourced and edited from News 18 hindi. 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.