Misinformation about CIBIL scores spreads quickly through friends, family, and social media, and acting on bad advice can genuinely hurt your creditworthiness. Here are seven of the most common myths, and what is actually true about how your credit score works.
Myth 1: Checking Your Own CIBIL Score Lowers It
This is false. When you check your own credit score, it is recorded as a soft inquiry, which has no impact on your score whatsoever. Only hard inquiries, which happen when a lender checks your score as part of a loan or credit card application, can have a small, temporary impact. Checking your own score regularly is actually good financial practice.
Myth 2: Closing Old Credit Cards Improves Your Score
Closing a credit card, especially an old one, can actually hurt your score in two ways: it reduces your overall available credit limit, which increases your credit utilisation ratio, and it shortens your average credit history length. Unless the card carries a high annual fee you genuinely cannot justify, keeping old cards open and lightly used is usually better for your score.
Myth 3: You Need to Carry a Balance to Build Credit
Carrying an unpaid balance and paying interest does nothing to improve your score and only costs you money. What actually builds your score is consistent, on-time repayment, whether you pay the full bill or just the minimum due. Paying your full statement balance every month builds excellent credit history without any interest cost.
Myth 4: A Single Missed Payment Will Permanently Ruin Your Score
A single missed payment does hurt your score, but it is not permanent. The impact diminishes over time, especially if you resume on-time payments immediately and the missed payment does not recur. Late payments typically stay on your report for a few years, but their negative weight on your current score reduces significantly the longer your subsequent payment history stays clean.
Myth 5: Your Salary Affects Your CIBIL Score
Your income is not a factor in CIBIL score calculation at all. The score is based purely on your credit behaviour: repayment history, credit utilisation, length of credit history, credit mix, and recent credit inquiries. However, lenders do separately consider your income when deciding loan eligibility and amount, even if it does not touch your CIBIL score itself.
Myth 6: Being a Guarantor Has No Impact on Your Own Score
When you act as a guarantor for someone else's loan, that loan can appear on your own credit report, and if the primary borrower defaults or misses payments, it can negatively affect your score even though you never borrowed the money yourself. Think carefully before agreeing to be a guarantor for anyone.
Myth 7: You Cannot Get a Loan with a Low CIBIL Score
While a low score makes approval harder and interest rates higher, it does not make borrowing impossible. Many NBFCs and some banks offer secured loans or loans with a co-applicant even to borrowers with below-average scores, though typically at significantly higher interest rates and with stricter terms. Rebuilding your score before borrowing remains the financially smarter path wherever possible.
What Actually Moves Your Score
- Paying all EMIs and credit card bills on time, every time
- Keeping credit utilisation below 30% of your total limit
- Maintaining a healthy mix of secured and unsecured credit
- Avoiding multiple loan or credit card applications in a short period
- Keeping older accounts open and active
Use the CIBIL score guide on this site to understand exactly how each of these factors is weighted, and check your score periodically through official channels to track genuine progress rather than relying on assumptions.
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