5 Mistakes Hurting Your CIBIL Score

Most people assume that as long as they're paying their credit card bill every month, their CIBIL score is safe. In reality, several common habits quietly chip away at your score even when you never miss a due date.

The biggest one is credit utilisation — how much of your total available credit limit you're actually using. Bureaus generally recommend staying under 30%. If your card has a ₹1 lakh limit and you're regularly carrying ₹70,000–₹80,000 on it, that alone signals financial stress to lenders, regardless of whether you eventually pay it off. A related trap is paying only the minimum due: it avoids the late-payment fee, but the full outstanding amount still gets reported to the bureau as your balance, so your utilisation stays high and interest keeps piling up on the rest.

The second mistake is closing old credit cards. It feels like tidy financial housekeeping, but it can hurt your score in two separate ways — it reduces your total available credit limit (which pushes your utilisation ratio up even if your spending hasn't changed), and it shortens the average age of your credit history, which bureaus also factor in. A card you've held for years and rarely use is often doing more for your score sitting open than it would closed.

Late payments remain the single most damaging habit, since payment history carries the heaviest weight in your score calculation. Even one missed due date can stay on your report and pull your score down for a while. Applying for too many new cards in a short span is another quiet drag — each application triggers a hard enquiry, and a cluster of enquiries makes you look "credit hungry" to lenders even if you never actually miss a payment.

Finally, treating your credit card like an ATM — using it for cash withdrawals — is worth avoiding where possible. Cash advances usually carry no interest-free grace period and start accruing charges immediately, while also adding straight to your utilisation.

None of these mistakes require drastic fixes. Paying the full statement balance, keeping old cards open with the occasional small transaction, and spacing out new card applications go a long way toward protecting a score that took years to build.