In 2025, a good credit score is more than just a number — it’s a gateway to easy approvals, better interest rates, and financial security. Yet, many people unknowingly harm their scores through common financial habits. These mistakes, though small, can have a long-lasting impact on your creditworthiness.
Let’s explore the top 5 silent mistakes that could be dragging down your CIBIL score — and how to avoid them.
1. Missing EMI or Credit Card Due Dates
Your payment history makes up a large portion of your credit score. Even one missed EMI or credit card payment can reduce your score by 50–100 points, depending on your profile.
Why it hurts:
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Late payments are reported to credit bureaus.
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Missed payments stay on your record for years.
Solution:
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Set up auto-debit mandates or reminders.
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Prioritize timely payments, especially for unsecured credit.
2. High Credit Utilization Ratio
The credit utilization ratio is the percentage of available credit you’re using. Experts recommend keeping it under 30%, but many people unknowingly go well beyond that.
Example:
If your credit limit is ₹1,00,000 and you consistently spend ₹70,000, your utilization is 70%, which negatively impacts your credit profile.
Fix:
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Spend within limits.
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Request a limit increase or spread expenses across multiple cards.
3. Closing Old or Dormant Credit Cards
You might think closing old cards is smart, but it shortens your credit history length and increases your overall utilization.
Why it matters:
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Credit age is a key component in score calculation.
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Fewer cards = higher utilization ratio.
Tip:
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Keep old, fee-free cards open.
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Use them occasionally to keep them active.
4. Frequent Loan or Credit Card Applications
Every time you apply for a credit card or loan, it results in a hard inquiry on your credit report. Too many of these in a short span make you look financially unstable.
Impact:
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Multiple inquiries can lower your score.
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Banks may view you as “credit hungry.”
Advice:
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Space out applications.
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Use soft inquiry tools to check eligibility.
5. Ignoring Credit Report Errors
Incorrect entries, duplicate accounts, or wrong repayment statuses can drastically hurt your score. As per RBI guidelines, you have the right to dispute and correct such errors.
Examples of errors:
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Incorrect loan closure status
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Payment marked overdue when already paid
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Duplicate entries
What to do:
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Check your credit report every 3–6 months.
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Dispute errors immediately with the respective bureau.
🧠 Quick Recap: Mistakes That Lower Your Credit Score
| Mistake | Why It Hurts | Fix |
|---|---|---|
| Missed EMI/Payments | Damages payment history | Set auto-debit |
| High Utilization | Indicates credit risk | Keep below 30% |
| Closing Old Cards | Shortens credit age | Keep them open |
| Too Many Inquiries | Seen as desperation | Apply wisely |
| Ignoring Errors | Reduces score unfairly | Review reports regularly |
🔍 FAQs – Credit Score Mistakes
❓ What is the biggest reason for credit score drops?
Missed or delayed payments are the most damaging factor.
❓ How often should I check my CIBIL report?
At least twice a year, using official portals like CIBIL or RBI’s credit access portal.
❓ Can I get a loan if my score is low due to inquiries?
Yes, but you’ll likely pay a higher interest rate. Work on improving your profile before applying.
❓ Does settling a loan reduce credit score?
Yes, loan settlements are considered negative and reduce your credibility.
✅ Call to Action
If you’ve unknowingly made any of these mistakes, don’t worry — you can still fix your credit score with the right steps.
At CreditCares, we help MSMEs and individuals rebuild their credit and get access to better financial opportunities.
📞 Call now: 9830038870
📩 Email: creditcaresindia@gmail.com
🔗 Explore our Credit Score Improvement services
