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Is Credit Mix ruining your CIBIL score? Know what it is and how it affects the credit score.


Apart from the loan repayment history, many other factors affect your credit score. One of them is credit mix. Balance of credit mix is ​​very important in the case of CIBIL score.

Be it a secured loan or an unsecured loan, the CIBIL score is very important in the case of a loan. Most people think that the CIBIL score is prepared by looking at the repayment history of your previous loan. This is also true, but apart from the repayment history of the previous loan, many other factors affect your credit score. One of them is credit mix. Balance of credit mix is ​​very important in the case of CIBIL score. Know about it here-

What is credit mix and how does it affect the CIBIL score

Your credit mix is ​​determined by how many unsecured loans and how many secured loans you have taken earlier. For example, if you have taken unsecured loans like personal loan, credit card etc. many times in the past, but have not taken secured loans too often, then it sends a message to the bank that you are short of funds and your dependence on credit is very high. This has a bad effect on your CIBIL score.

On the other hand, if you have been taking both secured and unsecured loans when needed, and have also paid all of them on time, then the bank gets the message that you are capable of managing all types of loans. In such a situation, your credit mix remains balanced and your CIBIL score is better. This is the reason why most experts discourage taking unsecured loans more often.

These factors also affect your credit score

Credit Utilization Ratio

The percentage of your credit limit that you use is your credit utilization ratio. Use only up to 30% of your credit card limit. Avoid making large purchases using a credit card. A high credit utilization ratio shows that you are overly dependent on your credit card. This affects your CIBIL score.

Credit History

Your credit history starts getting created when you take a loan or a credit card for the first time. Your credit history is also considered while preparing the CIBIL score. How old is your credit history and whether you have made timely payments after taking a loan or using a credit card in the past or not, all these things are considered. This credit history also affects your CIBIL score.

Loan repayment history

If you have taken a loan before or you use a credit card, then their repayment history is seen. That is, whether you pay the EMI on time or not, it affects your CIBIL score. Paying the loan EMI on time increases your CIBIL score and not paying it decreases it.

Other factors

Apart from these, your CIBIL score is calculated from some other things like wrong information in your credit report, you have ever done loan settlement before, you are a guarantor of someone's loan and it is not being paid etc. All these also affect your CIBIL score and it can spoil your score.

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