Do not make these 7 mistakes, your CIBIL will be spoiled, you will not get a loan even after begging!
Often people do not pay attention to the CIBIL score, but if the CIBIL score or credit score is low, then there is a problem in getting a loan. It is a three-digit number or say a score. Its range is from 300 to 900 points. It shows your eligibility to take a loan. Every bank checks the CIBIL score of that person before giving a loan. Let us know about such 5 factors, due to which the CIBIL score decreases.
If you already have a loan running and you miss any EMI of it, then it has a direct impact on your CIBIL. This reduces the CIBIL score. If you miss more EMIs or default on the loan, then your CIBIL will become so bad that no bank will give you a loan. Every bank will fear that you will not repay its loan, due to which it may suffer a loss.
If you have taken a big loan, then this also affects your CIBIL. It shows that you already have a lot of debt, which is yet to be repaid. In such a situation, if the bank gives you more loans, then you may not be able to repay it. This is the reason why people's CIBIL score decreases after taking a home loan.
Many times a person applies to different banks to get a loan and takes the loan from the bank from which he gets the loan at a lower interest rate. Keep in mind, that if you have applied for a loan in many banks, then your CIBIL score will be checked by each bank and this happens under hard inquiry. Let us tell you that when a bank or NBFC checks your credit score, it is called a hard inquiry. Whereas when you check CIBIL online yourself, it is called a soft inquiry. Your CIBIL score starts decreasing due to hard inquiry.
If you make a big purchase or a lot of purchases with a credit card, it affects your CIBIL score. This increases the utilization ratio of your credit card, which reduces your CIBIL score. You should use less than 30 percent of your credit card limit for shopping, otherwise your CIBIL score may deteriorate.
If you apply for a credit card repeatedly, it also affects your CIBIL. It is just like when you apply for a loan, CIBIL gets affected. This is because there is a hard inquiry in this too, which reduces the CIBIL. However, this is temporary and the CIBIL gets better again in some time.
If you close a credit card, it also affects your CIBIL. When a credit card is closed, your total limit decreases, due to which your credit utilization ratio increases. The increase in this ratio hurts the CIBIL score and it decreases.
If you close a loan before time, it also affects your CIBIL. Two types of loans are provided by the bank, secured and unsecured. If you take a secured loan and close it on time, it may reduce your CIBIL a little. However, this is temporary and it gets better again in some time.
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