Your CIBIL score matters: Avoid these mistakes to keep it high

Your CIBIL score is a three-digit number that reflects your creditworthiness and financial stability. It is used by lenders and financial institutions to assess your credit risk and determine your eligibility for loans and credit cards. A good CIBIL score is important if you want to access credit and financial products at favorable rates and terms. Here are some mistakes to avoid in order to maintain a good CIBIL score:

1. Missing payments: One of the biggest mistakes you can make when it comes to your CIBIL score is missing payments on your loans or credit cards. Payment history is one of the most important factors that goes into your CIBIL score, and missed payments can have a significant negative impact. Be sure to make your payments on time and in full to avoid damaging your CIBIL score.
2. Maxing out your credit cards: Another mistake to avoid is maxing out your credit cards. Credit utilization, or the amount of credit you are using relative to your credit limit, is another important factor in your CIBIL score. Using too much of your available credit can make you look risky to lenders and hurt your score. To avoid this, try to keep your credit utilization below 30% of your credit limit.
3. Closing old credit cards: While it might seem like a good idea to close old credit cards that you no longer use, doing so can actually hurt your CIBIL score. Credit history is another important factor in your CIBIL score, and having a long credit history can be beneficial. Instead of closing old credit cards, consider leaving them open and using them occasionally to maintain a longer credit history.
4. Applying for too much credit: Applying for too much credit in a short period of time can also hurt your CIBIL score. Each time you apply for credit, it generates a hard inquiry on your credit report, which can have a negative impact on your score. Try to limit the number of credit applications you make and only apply for credit when you truly need it.
5. Not correcting errors on your credit report: Finally, be sure to check your credit report regularly and correct any errors you find. Errors on your credit report can lower your CIBIL score, so it is important to fix them as soon as possible.

By avoiding these mistakes, you can maintain a good CIBIL score and improve your chances of getting approved for credit and financial products at favourable rates and terms.