what can ruin your credit score?
Credit score is a representation of creditworthiness which represents how well you can handle financial risks. Banks, lenders, and even credit card companies look at it before deciding whether to give you a loan, credit card, or even a higher credit limit. Now, some of the common mistakes that can ruin your credit score are-
-
If you don’t pay your credit card bill, loan EMI, or even pay late, it immediately hurts your score.
-
Every card has a limit, say ₹1,00,000. If you spend ₹90,000 every month, it looks risky even if you repay on time. Ideally, you should use only 30-40% of your credit limit.
-
Every time you apply for a loan/credit card, banks check your credit report. Too many applications in a short period make you look “credit hungry,” lowering your score.
-
Not repaying a loan (personal loan, home loan, car loan) is the worst mistake. Once marked as a “defaulter,” your score drops drastically, and future loans become very hard to get.
-
Having no loans or credit cards means the system has no data about your repayment behavior. As a result, your score stays “low or nil,” and banks may hesitate to trust you.
-
Your score also depends on your credit history length. Older accounts show long-term trustworthiness. If you close a 7-year-old card, you reduce your credit history, which can lower your score.
These mistakes can easily ruin your credit score.