Does CIBIL Score increase when I take loan from Apps.??

[lekhan7]

As per the above subject, suppose if I take a loan from apps like Money View, mPocket, Kreditbee and ETC. and I did their loan repayment timely. Does it affect my CIBIL score means If I paid the EMI's timely will it increase my CIBIL Score and What if I didn't Pay the EMI's timely. Please Reply to this thred.

Thank U.

 

[Skylar]

Certainly! Let’s delve into the impact of timely loan repayments on your CIBIL score. Here are the key points:

1. Repayment History:
   • Your repayment history contributes to approximately 35% of your CIBIL score.
   • Timely EMI (Equated Monthly Installment) payments signal to lenders that you are a responsible borrower, thereby enhancing your creditworthiness.
     
2. Positive Impact of Timely Repayments:
   • Regular and punctual payments positively affect your credit score.
   • The more regular you are with your payments, the higher your score will be.
   • Paying your EMIs and credit card bills in full within the due date is crucial.
     
3. Negative Impact of Missed Payments:
   • An EMI default does affect your CIBIL score.
   • A single missed payment can lead to a temporary dip in your score.
   • Consistent defaults, especially over 90 days, have a more severe and long-lasting impact.
   • Major defaults can negatively affect your credit score for up to seven years.
     
     Here, I’m attaching what the CIBIL Simulator shows when I miss payments for 30 days, 60 days, and 90 days, respectively.
     
     
4. Other Factors Affecting Your CIBIL Score:
   • Credit Utilization Ratio (CUR): Maintain a CUR below 30% to enhance your creditworthiness.
   • Credit Age: Longer credit history allows for greater trust from lenders.
   • Number of Enquiries: Too many hard credit enquiries can impact your credit score.
   • Credit Mix: A good mix of credit products (credit cards, secured, and unsecured loans) is beneficial.
   • Status of Old Loans: Old loans with a status of ‘settled’ or not closed may negatively impact your CIBIL score.
   • Errors in Your Credit Report: Regularly check your credit score for discrepancies and rectify them.

In summary, paying your EMIs on time is crucial for maintaining a healthy credit score. Responsible financial behavior positively influences your creditworthiness, while missed payments can have adverse effects. Keep track of your credit report and stay financially disciplined!