Paying Bills on Time but Your CIBIL Score Is Falling?

Many borrowers are surprised to see their CIBIL or credit score drop even though they pay their EMIs and credit card bills on time. Banking experts explain that timely repayments account for only about 35% of the credit score, while the remaining 65% depends on several other financial factors.

One major reason is a high credit utilization ratio. Using more than 30% of your total credit card limit can negatively affect your score, even if you clear the bill in full before the due date. Closing old credit cards can also reduce your total credit limit and shorten your credit history, which may lower your score. Similarly, applying for multiple loans or credit cards within a short period leads to multiple hard inquiries, which can impact your credit profile.

Your CIBIL score may also be affected if you are a guarantor or co-applicant on a loan and the primary borrower delays repayments. In addition, technical errors in your CIBIL report, such as incorrect loan details or missing payment records, can hurt your score. Experts advise checking your credit report regularly and reporting any discrepancies immediately.