{"id":15022,"date":"2025-11-20T11:19:47","date_gmt":"2025-11-20T11:19:47","guid":{"rendered":"https:\/\/www.indifi.com\/blog\/?p=15022"},"modified":"2025-11-20T11:19:48","modified_gmt":"2025-11-20T11:19:48","slug":"things-you-didnt-know-affect-your-credit-score","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/","title":{"rendered":"Things You Didn\u2019t Know Affect Your Credit Score"},"content":{"rendered":"\n<p>When planning a loan or getting a new <strong><a href=\"https:\/\/www.indifi.com\/blog\/credit-score-vs-credit-rating-whats-the-difference\/\">credit card<\/a><\/strong> in India, many of us focus on obvious factors like paying bills on time or keeping low debt. But several lesser-known issues can also sway your credit score. In this article we explain what affects your credit score in practical terms, using data and real examples. We\u2019ll cover common credit card mistakes in India and other surprising factors, and share actionable tips to improve your CIBIL score. By the end, you\u2019ll have clear advice on keeping a strong credit rating.<\/p>\n\n\n\n<p>Even one missed payment can hurt your credit score. In fact,&nbsp;<strong>payment history<\/strong>&nbsp;is the biggest factor (about 35% of your score). Recent data shows roughly&nbsp;<strong>28% of Indian credit card users missed at least one payment last year<\/strong>. Even a 30-day late EMI or credit card bill can&nbsp;<strong>slash your score by around 100 points<\/strong>. In short: pay all EMIs and card bills on time. Set up automatic payments or calendar reminders so you never miss a due date.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/www.indifi.com\/business-loan\"><img decoding=\"async\" loading=\"lazy\" width=\"318\" height=\"159\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2025\/07\/download.png\" alt=\"\" class=\"wp-image-14802\"\/><\/a><\/figure><\/div>\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_67_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Credit_Utilization_How_Much_You_Owe\" title=\"Credit Utilization (How Much You Owe)\">Credit Utilization (How Much You Owe)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Applying_for_New_Credit_Hard_Inquiries\" title=\"Applying for New Credit (Hard Inquiries)\">Applying for New Credit (Hard Inquiries)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Ignoring_Your_Credit_Report_Errors_to_Fix\" title=\"Ignoring Your Credit Report (Errors to Fix)\">Ignoring Your Credit Report (Errors to Fix)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Closing_Old_Accounts_Credit_History_Length\" title=\"Closing Old Accounts (Credit History Length)\">Closing Old Accounts (Credit History Length)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Being_a_Co-signer_or_Guarantor\" title=\"Being a Co-signer or Guarantor\">Being a Co-signer or Guarantor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Credit_Mix_and_%E2%80%98Thin_Credit_Files\" title=\"Credit Mix and \u2018Thin\u2019 Credit Files\">Credit Mix and \u2018Thin\u2019 Credit Files<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#Summary_and_Tips_for_Maintaining_a_Good_Credit_Score\" title=\"Summary and Tips for Maintaining a Good Credit Score\">Summary and Tips for Maintaining a Good Credit Score<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.indifi.com\/blog\/things-you-didnt-know-affect-your-credit-score\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Credit_Utilization_How_Much_You_Owe\"><\/span><strong>Credit Utilization (How Much You Owe)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Your&nbsp;<strong>credit utilization ratio<\/strong>&nbsp;is how much of your total available credit you\u2019re using. Experts recommend keeping this below about 30%. In India the average utilization is around 45%, and many cardholders run balances above 70%. High utilization signals to lenders that you\u2019re financially stretched, which can lower your score. To avoid this mistake, try to pay down large credit card balances quickly. Spread out big expenses or use a mix of credit (for example, a small personal loan instead of maxing out a card) so your utilization stays low.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applying_for_New_Credit_Hard_Inquiries\"><\/span><strong>Applying for New Credit (Hard Inquiries)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Each time you apply for a <strong><a href=\"https:\/\/www.indifi.com\/business-loan\">credit card or loan<\/a><\/strong>, lenders make a\u00a0<strong>hard inquiry<\/strong>\u00a0on your credit report. One or two inquiries are usually fine, but multiple applications in a short span add up. Research shows applying for\u00a0<strong>three or more credit cards within six months<\/strong>\u00a0can knock your score down by\u00a0<strong>15\u201320 points<\/strong>. Hard inquiries stay on your report for two years (though they only count in scoring for one year). To avoid this, only apply for credit when you really need it. Use comparison sites to find the best card or loan first, and space out any new applications.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ignoring_Your_Credit_Report_Errors_to_Fix\"><\/span><strong>Ignoring Your Credit Report (Errors to Fix)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Many borrowers assume their credit report is automatically correct, but errors are common. An RBI study found about&nbsp;<strong>19% of credit reports contain mistakes<\/strong>&nbsp;that can drag down the score. Errors might be wrong loan amounts, incorrect payment status, or even identity details (like a misspelled name). It\u2019s important to&nbsp;<strong>regularly check your CIBIL (and other bureaus\u2019) report<\/strong>&nbsp;\u2013 you are entitled to one free CIBIL report per year. If you spot an error, dispute it right away. Correcting mistakes can immediately improve your score.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Closing_Old_Accounts_Credit_History_Length\"><\/span><strong>Closing Old Accounts (Credit History Length)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The length of your credit history also matters (around 15% of your score). Surprisingly,&nbsp;<strong>closing old credit cards or loans can lower your score<\/strong>. That\u2019s because it shortens your average account age and can hike up your overall utilization (since you have less credit available). For example, if you\u2019ve had a credit card for 10 years, closing it would erase that long history. Instead of cancelling an old card, consider keeping it open and making occasional small purchases that you pay off each month. This preserves your history and shows responsible use.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Being_a_Co-signer_or_Guarantor\"><\/span><strong>Being a Co-signer or Guarantor<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you&nbsp;<strong>co-sign a loan or act as a guarantor<\/strong>&nbsp;for someone, their payment behavior affects your credit too. Many people don\u2019t realize this: if the primary borrower misses an EMI,&nbsp;<em>your<\/em>&nbsp;CIBIL score will take a hit as well. Only agree to be a guarantor if you trust the borrower completely and are prepared to cover the payments if needed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Credit_Mix_and_%E2%80%98Thin_Credit_Files\"><\/span><strong>Credit Mix and \u2018Thin\u2019 Credit Files<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Your score also considers whether you have a&nbsp;<strong>mix of credit types<\/strong>. Having only one type of credit (for example, only credit cards or only one personal loan) might not be as strong as showing you can handle different products. A balanced mix (like a home loan or car loan together with a credit card) can boost your score. On the flip side, having&nbsp;<em>no<\/em>&nbsp;credit history (for example, if you\u2019ve never taken a loan or used a card) means lenders have no data to judge you by. In that case, your score can be low simply because you have a \u201cthin\u201d credit file. If you have little credit history, start building it responsibly: get a secured credit card or a small loan and make timely payments. Over time this helps raise your CIBIL score.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Summary_and_Tips_for_Maintaining_a_Good_Credit_Score\"><\/span><strong>Summary and Tips for Maintaining a Good Credit Score<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In short,&nbsp;<strong>what affects your credit score<\/strong>&nbsp;includes not just obvious factors (like on-time payments) but also these often-overlooked ones: high balances, frequent applications, report errors, closing old accounts, acting as a guarantor, and having only one type of credit. By managing each carefully, you can&nbsp;<strong>improve your credit score<\/strong>&nbsp;over time.<\/p>\n\n\n\n<p>Here are some key&nbsp;<strong>CIBIL score tips<\/strong>&nbsp;to keep in mind:<\/p>\n\n\n\n<ul>\n<li><strong>Pay on time.<\/strong>&nbsp;This is the single biggest factor. Even one late EMI can cut about 100 points off your score. Use auto-pay and reminders to avoid slips.<\/li>\n\n\n\n<li><strong>Keep balances low.<\/strong>&nbsp;Use less than 30% of your total credit limit. High utilization (even above 50%) raises red flags. Paying down debt quickly will improve your score.<\/li>\n\n\n\n<li><strong>Space out new credit.<\/strong>&nbsp;Don\u2019t apply for many cards or loans at once. Three or more new cards in six months can drop your score 15\u201320 points. Only seek new credit when necessary.<\/li>\n\n\n\n<li><strong>Check your reports.<\/strong>&nbsp;Review your CIBIL report (and others) at least once a year and dispute any errors. Fixing mistakes can quickly boost your score.<\/li>\n\n\n\n<li><strong>Keep old accounts open.<\/strong>&nbsp;A long credit history is valuable. Avoid closing your oldest credit card accounts, as this preserves history and keeps your available credit higher.<\/li>\n\n\n\n<li><strong>Maintain a credit mix.<\/strong>&nbsp;Use both secured loans (like a home or auto loan) and unsecured credit (credit cards, personal loans) responsibly. A good mix shows lenders you can manage different debts.<\/li>\n\n\n\n<li><strong>Be cautious as guarantor.<\/strong>&nbsp;Remember that co-signing a loan makes you liable too \u2013 any late payment by the borrower will affect your score.<\/li>\n<\/ul>\n\n\n\n<p>By following these tips and staying on top of your credit behavior, you\u2019ll build a stronger CIBIL score. A high score opens doors to better loan terms, lower interest rates, and premium credit cards. Keep informed, use credit wisely, and your credit health will improve over time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li><strong>What is loan against Mutual Funds?<\/strong><br>Loan against mutual funds (LAMF) allows you to borrow cash against your mutual fund investments as collateral. You can use Volt Money to lien mark your mutual funds digitally to avail an instant limit without losing the ownership of your mutual funds and all the associated benefits with it. Funds will be made available in the form of an overdraft facility.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>What is the annual fee of the Axis Privilege Card?<\/strong><br>The annual fee for the Axis Privilege Card is typically Rs. 1,500 plus taxes. This fee can be waived if the cardholder achieves an annual spending milestone, though the exact spending amount for the waiver can vary by card variant. For example, a common waiver condition is spending above Rs. 2.5 lakh in an anniversary year.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>How do I receive Luxe Vouchers?<\/strong><br>Luxe Vouchers are digital gift cards that can be redeemed across popular luxury and lifestyle brands such as Myntra, Flipkart, Pantaloons, and more. Once you qualify for the offer, the voucher code will be sent directly to your registered email ID or mobile number. In most cases, vouchers are delivered within 5\u20137 working days after successful validation of your transaction or application.<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>Can I apply with a low CIBIL score?<\/strong><br>Yes, you can apply even with a low CIBIL score, but your chances of approval may be limited. Most banks and lenders prefer a CIBIL score of 750 or above for quick approval and better interest rates. If your score is lower, some lenders may still consider your application based on other factors such as your income, employment stability, or existing relationship with the bank. However, you may be offered a lower loan amount or higher interest rate. Improving your credit score before applying can increase your chances of getting approved on favorable terms.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>When planning a loan or getting a new credit card in India, many of us focus on obvious factors like paying bills on time or keeping low debt. But several lesser-known issues can also sway your credit score. In this article we explain what affects your credit score in practical terms, using data and real [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/15022"}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=15022"}],"version-history":[{"count":1,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/15022\/revisions"}],"predecessor-version":[{"id":15023,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/15022\/revisions\/15023"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=15022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=15022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=15022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}