Can Your Bajaj CIBIL Score Fall in Spite of Timely Payments?

Credit scores undoubtedly play a crucial role in our financial lives as one of the most important indicators of loan and credit card eligibility and the foundation for risk-based pricing models as well nowadays. But amidst the focus on loan and card payments, we frequently pay less attention towards the other significant factors or financial decisions that are capable of affecting your credit score. This is because it is a widely held belief that the primary factor determining your credit score is how long it has been since you last made a payment on a debt. This is evident when you check CIBIL score by pan card.

 

So, the following six financial choices should be avoided if you want to raise your credit score even if you pay all of your credit card bills on time and in full each month, in addition to your loan EMIs:

 

Failing to maintain a 30% or lower credit card utilisation rate

The credit bureaus will slightly lower your bajaj CIBIL score because lenders view a credit utilisation ratio above 30% as a sign of credit appetite. In this context, the term “ratio” refers to the proportion between the balance due on a credit card and the total credit limit.

 

It’s recommended to keep your balance under 30% of your credit card’s overall limit. If you frequently spend more than this amount, get in touch with the business that issued your card to ask for a higher credit limit or to apply for a new credit card. Your credit utilisation ratio will decrease if you increase your overall credit limit while maintaining the same level of card usage.

 

Repeated credit inquiries to multiple lenders

If you apply for a loan or credit card, a lender will use your credit report from one of the four major credit bureaus to check CIBIL score by pan card. When a lender actively seeks out your credit history when performing the task to check credit score online, a hard enquiry is made, which is one that is requested and has a negative impact on your credit score.

 

Additionally, making a lot of direct credit inquiries in a short amount of time may hasten the decline in your credit score, which could affect your ability to get loans in the future. methods for rapidly lowering his bajaj CIBIL score.

 

You can save time and effort by using an online financial portal to compare your credit score, income, and other factors with those of many lenders rather than making numerous separate credit inquiries to different lenders. The best lender and credit option for you can then be selected. The credit reporting agencies refer to these markets’ requests for your credit report as “soft” inquiries because they have no effect on your credit score. You can see that when you check CIBIL score by pan card.

 

The credit mix is made up of more unsecured loans

The ratio of secured to unsecured debt in your total debt determines your credit mix. Because lenders favour borrowers with secured loans, such as a mortgage, a loan against property, or a car loan, credit bureaus view a higher percentage of secured loans favourably. Reduce the proportion of your debt that is made up of unsecured loans or credit card balance transfers if you want to improve your credit score. You can accomplish this by paying off your current unsecured debt or by taking on new, more secure debt, like a loan secured by your gold or stock holdings, a second mortgage on your home, or a comparable arrangement.

 

Ignorance towards loan you guaranteed or co-signeds

Similar to getting a second credit card, taking on additional responsibility by cosigning or guaranteeing a loan is an option. Rules require co-signers and guarantors to make prompt payments on the loans to which they are connected. Both a late payment and a default would lower your bajaj CIBIL score equally. You must keep track of the repayment status of any loans you have guaranteed or co-signed on a regular basis to make sure payments are being made on time and to guard against any potential damage to your credit rating from the primary borrower’s poor financial management.

 

Inaccuracy in credit report itself

Information from lenders and credit card companies is now included in your credit report, which the credit bureau uses to calculate your credit score. To see if your lender or a credit bureau may have made a mistake, provided false information, or engaged in fraud against you, you can check CIBIL score by pan card. As a result, you must frequently order your credit report, ideally once per month. If you can find any errors, report them as soon as you can to the credit bureau and lender so that the matter can be resolved as soon as it is practical. Subject to certain limitations, consumers have the right to one free credit report per year from each of the three major credit reporting agencies. Customers of online financial marketplaces, on the other hand, frequently receive free access to their credit reports as well as monthly updates.

 

Saying goodbye to all old credit cards

One of the many factors that credit bureaus consider when determining your creditworthiness is the typical length of time you’ve had credit accounts open. Keep your oldest credit card accounts open because lenders will be more inclined to take your application into consideration if you have more credit history. In comparison to those with longer credit histories, your credit score will rise. If you have a lengthy and established credit history, your credit score will rise. When an older credit card is cancelled, your average and overall credit limits are reduced, which raises your credit utilisation ratio and lowers your bajaj CIBIL score.

 

It makes sense to keep the older credit card if you have more than one. It is preferable to cancel newer cards rather than older ones if you need to cancel some of your current cards.

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