The following are the 11 Factors that lead to low CIBIL score in India:
- Late or missed payments: A history of late or missed payments on loans or credit cards can significantly lower your CIBIL score.
- High credit utilization: Maintaining a high credit utilization ratio, meaning using a large percentage of your available credit, can also lower your score.
- Multiple hard enquiries: A high number of hard enquiries, such as applying for multiple loans or credit cards, can also lower your score.
- Excessive number of loans: Having too many loans can be viewed as a sign of financial instability and can lower your score.
- High outstanding debt: High outstanding debt, such as unpaid credit card balances or unpaid loan amounts, can also lower your score.
- Default or settlement of loans: Defaulting on a loan or settling a loan for less than the full amount can have a negative impact on your score.
- Closing credit card accounts: Closing credit card accounts, especially if they have a high credit limit, can lower your score.
- Limited credit history: Having a limited credit history, meaning you haven’t had any loans or credit cards for a long period of time, can also lower your score.
- High credit card balances: Carrying high credit card balances can be viewed as a sign of financial instability and can lower your score.
- No credit mix: Having only one type of credit, like only credit card or only personal loan, can lower your score as lenders like to see a mix of credit types.
- Errors in credit report: Errors in your credit report can also lower your CIBIL Score drastically.