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What Factors Affect Credit Scores in India?

A credit score is one of the most important numbers in your financial life. In India, credit scores are usually provided by CIBIL, Experian, Equifax, and CRIF Highmark, and they range between 300 and 900. A higher score (750+) improves your chances of getting loans, credit cards, and better interest rates. See our full blog on "What Factors Affect Credit Scores in India?"


What Factors Affect Credit Scores in India?
What Factors Affect Credit Scores in India?

But what actually affects your credit score? Let’s break it down.

1. Repayment History (35%)

  • Timely EMI and credit card payments are the biggest factor.

  • Late payments, defaults, or settlements negatively impact your score.✅ Tip: Always pay EMIs and credit card bills before the due date.

2. Credit Utilization Ratio (30%)

  • This is the percentage of credit you use out of your total limit.

  • Using more than 30–40% of your credit limit regularly lowers your score.✅ Tip: Keep utilization low by spreading expenses across multiple cards or increasing your credit limit.

3. Length of Credit History (15%)

  • The longer you’ve responsibly used credit, the better.

  • Old credit cards and loans add positively to your profile.✅ Tip: Never close your oldest credit card, even if you don’t use it much.

4. Types of Credit (10%)

  • A healthy mix of secured loans (home loan, car loan) and unsecured loans (credit cards, personal loans) is good for your score.

  • Too many unsecured loans signal higher risk.✅ Tip: Balance credit cards with long-term secured loans.

5. Number of Credit Inquiries (10%)

  • Every time you apply for a loan/credit card, lenders make a “hard inquiry.”

  • Multiple hard inquiries in a short time hurt your score.✅ Tip: Apply only for credit you genuinely need.

Other Minor Factors

  • Errors in Credit Report: Wrong entries, duplicate loans, or identity mismatches.

  • Co-Signed Loans: If the primary borrower defaults, your score also drops.

  • High Outstanding Balances: Carrying unpaid dues for long periods signals financial stress.


Final Thoughts

Your credit score is shaped by your financial discipline. The top three factors—repayment history, credit utilization, and credit age—make the biggest difference. By managing these carefully, you can steadily build and protect your score.



What Factors Affect Credit Scores in India?

👉 For a detailed analysis of your report and personalized guidance, visit MyExcellentScore.com and start improving your credit health today.


 
 
 

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