Plz tell me how to find out why credit score decreased??
If you checked your credit score and noticed a significant dip, first of all, don’t panic. It is common than you think. This 3-digit number, which ranges between 300 and 900, keeps changing based on your financial behaviour.
Then, try to identify the reasons behind your credit score dropping. The most common reasons are:
- Late or Missed Payments
If you miss paying your credit card bill or EMI on time, even for a single month, you can witness such incidents.
- Too Many Credit Applications
Suppose you applied for a loan. The bank will inquire and evaluate your credit report. And then give you approval. This activity (hard inquiry) can lower your credit score for the time being.
- High Credit Utilisation Ratio
If you exhaust your credit limit almost every month, it signals that you are highly dependent on the credit card, which can drop your CIBIL score by a few points.
- Entered Incorrect Information
Besides, wrong information on your credit report, such as incorrect data or wrong identity proof submission, can decrease the score.
The best thing is, you can improve your score by implementing some tips, such as never forgetting to pay EMIs and credit card bills, paying before the due date, keeping utilisation low and checking your credit report periodically. I suggest that you think of your CIBIL score as a financial health parameter that needs your consistent care.