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Top 5 Reasons that your CIBIL Score goes down

Top 5 Reasons that your CIBIL Score goes down – A CIBIL Score is a 3 digit number that indicates your financial health. The range of this score may vary from 300-900 depending on your records of payment and credit exposure.

If you are planning to apply for a loan, then a CIBIL Score is very crucial.

The Banks assess the previous records and a CIBIL score before approving your loan. A score of about 750 is considered as a decent score. A good CIBIL score has many benefits attached to it, like easy loan approval, competitive interest rates and high credit sanctions.

If you are wondering why is your CIBIL Score Low?

Then probably here are the reasons why-

  1. Payment History – Delay in repayment of your loan, constantly missing deadlines and outstanding payments on your credit card can have a bad effect on your CIBIL score. Paying EMIs on time is very important. And if you are a regular defaulter that might affect your CIBIL score drastically.
  2. Multiple Loans – If you have taken multiple loans from different banks and all at the same time. It would increase the debt burden and simultaneously reduce your repayment capacity. This not only applies to loans, but also credit card over dues.
  3. Rate of credit utilization – We believe that if we repay our dues on time than our CIBIL Score will remain put. But this is not how it works. Even if a credit card user goes overboard while using a credit card it may have an impact on its CIBIL Score. You must not take credit of more than 45% to 55% of sanctioned limit.
  4. No Credit History – Just as much as the bad credit history hurts our CIBIL score. So does no history, will harm your score. You need to take loans and repay them accordingly before the deadline to be in the good books. No credit history equals to No CIBIL score. You have to manage the right mix of secured and unsecured loans to improve your credit score.
  5. Mistakes – There are chances that the bank has made a mistake while assessing your credit history. Which is why your CIBIL score is low. However, if you have confidence in your credit history. You can always go to the banks and report mishap and get it rectified.
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CIBIL Score is very important for banks to determine your credit worthiness. One has to try to maintain a CIBIL score of 700-900, as it considered a good one.

It is advised that to maintain a good credit history and avoid low CIBIL Score. You will have to pay your dues on time, maintain your expenses as per your credit limit, and monitor your account on a timely basis. This will improve your CIBIL Score.

You can keep a track of your CIBIL Score and review your CIR (Credit information report). This will help you to know which financial activity is pulling your credit score down.

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Personal Loan Interest Rates October 2019
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.45%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank11.50% - 18.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates October 2019
State Bank of India/SBI8.15% - 8.80%
HDFC8.25% - 9.30%
LIC Housing8.35% - 8.95%
PNB Housing Finance9.25% - 12.00%
Piramal Capital & Housing Finance9.00% - 9.10%
Tata Capital9.20% - 9.35%
ICICI Bank9.20% - 9.65%
Bank of Baroda8.40% - 9.40%
Axis Bank8.90% - 9.15%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%