CIBIL Score: It is very important to have a good CIBIL score in today's time. Its advantage is that you easily get a low-interest loan at a time of need. But if your CIBIL score is low, then you may face a lot of difficulties in getting a loan.

Many people believe that not paying the loan EMI is the main reason behind a bad CIBIL score, but in today's news, we are going to tell you that apart from not paying the loan EMI, what other reasons cause a bad CIBIL score?

People also resort to buying things on EMI with a credit card to increase their CIBIL score, but it has been seen many times that even after paying the EMI on time, their CIBIL score decreases instead of increasing. Let's know what is the reason behind this...

Whenever a person buys something on EMI with a credit card, his credit utilization increases. This reduces the credit score.

For example, if you buy something worth Rs 40,000 on a credit card with a limit of Rs 50,000 and its EMI is Rs 5,000. In this case, credit utilization will be considered equal to the price of that item, i.e. Rs 40,000 or 80 percent. It will keep decreasing as you pay EMI. In such a situation, one should always keep credit utilization in mind while making EMI.

Credit utilization should be this much.

To keep the CIBIL score correct, it is generally considered right to keep the credit utilization below 30 percent. If you want to increase your credit score rapidly, then keep the credit utilization between 10 to 20 percent.

This CIBIL score is considered correct.

A CIBIL score of 750-799 is considered very good. At the same time, a CIBIL score of 700-749 is considered good and a credit score of 650-699 is considered fine. Apart from this, a credit score below 650 falls in the bad category.

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