A CIBIL score is one of the most important factors lenders check before approving loans or credit cards. In India, it usually ranges between 300 and 900, and a higher score increases your chances of getting credit easily.
However, many people still believe in several Common Myths About CIBIL Score.
Let’s break down the most common misunderstandings in a simple and practical
way.
1.
Myth:
Checking Your CIBIL Score Lowers It
Truth: When you check your own score, it is a soft inquiry and does not affect
your credit score at all.
2.
Myth: A High
Salary Means a High CIBIL Score
Truth: Your income does not decide your score. Your repayment behavior and
credit management matter more.
3.
Myth: Closing
Old Credit Cards Improves the Score
Truth: Old cards show a long credit history. Closing them may actually reduce
your score.
4.
Myth: Only
Loan Defaults Affect the Score
Truth: Even small delays in credit card payments can negatively impact your
credit score.
5.
Myth: You
Need a Loan to Build a Credit Score
Truth: Responsible use of a credit card can also help build a strong credit
profile.
6.
Myth: Paying
the Minimum Amount Is Enough
Truth: Paying only the minimum amount regularly can increase debt and may
affect your score over time.
7.
Myth: Joint
Loans Don’t Affect Your Score
Truth: If you are a joint borrower or guarantor, missed payments can also
impact your credit score.
8.
Myth: Loan
Settlement Is Good for Your Score
Truth: A “settled” status can harm your credit profile because it means the
full amount was not repaid.
9.
Myth: No
Credit Means a Good Score
Truth: If you have never taken credit, lenders may not have enough data to
judge your reliability.
10. Applying for
Multiple Loans Is Harmless
Frequent loan applications create multiple hard inquiries, which can reduce
your score.
11. Credit Utilization
Doesn’t Matter
Using too much of your credit limit can signal financial stress to lenders.
12. Errors in
Credit Reports Never Happen
Sometimes mistakes appear in reports, so it’s important to check them
regularly. These are also part of the Common Myths About CIBIL Score that many people
believe without verifying their credit report.
13.
CIBIL Score
Is the Only Factor for Loan Approval
Lenders also consider income, employment stability, and repayment capacity,
which is why understanding the Common Myths About CIBIL Score is important before
applying for credit.
14.
Good
Financial Habits Build a Strong Score
Pay bills on time, keep credit usage low, and avoid unnecessary loans to
maintain a healthy credit score and avoid falling for Common Myths
About CIBIL Score.
Understanding these myths helps you manage your finances wisely
and maintain a strong credit profile for future financial needs.
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