Having too many credit cards can spoil your CIBIL score, you can avoid it with just these 4 ways!

Many people take many credit cards one after the other in the greed of all kinds of offers and cashback and often their credit score gets spoiled due to this. Let us understand how your CIBIL score gets affected due to having too many credit cards.

In today's time, the reach of credit cards is not limited to cities only, but people have started keeping credit cards in villages and towns as well. Credit cards have reached every corner of the country, but does everyone know the right way to use it? Very few people understand whether their way of using credit cards is right or not. This is the reason why many people take many credit cards one after the other in the greed of all kinds of offers and cashback and often their credit score gets spoiled due to this. Let us understand how having more credit cards affects your CIBIL score.

Payment history affects CIBIL

If you have many credit cards, sometimes you may forget the due date of a card and miss the payment. Even if you pay your credit card the very next day of the last date, it will be recorded in the record that you defaulted on a payment and this will affect your CIBIL. Let us tell you that your payment history plays the biggest role in the calculation of your credit score.

Take care of the debt-to-credit ratio

Whenever you take a credit card, you get it with a credit limit. If you use more than 30 percent of your credit limit, then it affects your CIBIL score. The limits of different credit cards can be different. In such a situation, if you have many credit cards, then it will be difficult for you to remember the limit of all separately. In this situation, you may use more than 30% of the limit on one or more of your cards, which will affect your CIBIL score.

Every new credit card is harmful!

Although most people think that they should have as many credit cards as possible, but it also causes many disadvantages to you. Whenever you take a new credit card, it affects your CIBIL. Although this effect is not much, but even a slight effect on the CIBIL score is harmful. With every new credit card, it is believed that your debt is increasing, that is, your credit risk is increasing. So the next time you apply for a new credit card, also think once that it will affect your CIBIL score.

Take care of credit portfolio

If you are taking the same kind of credit again and again, then it will affect your CIBIL. In such a situation, you should keep in mind that there should be diversification of credit in your portfolio. If you keep taking only credit cards, then it will have a bad effect on your CIBIL. However, if your credit portfolio has some credit cards, some home or auto loans and some personal loans, then your CIBIL score will keep getting stronger with the payment of every EMI.