Your Cibil score is a critical factor in determining your creditworthiness and financial health. It's a three-digit number that ranges from 300 to 900, with a higher score indicating better creditworthiness. If your Cibil score is dying or decreasing, there could be several reasons why.
Late Payments: Late payments are one of the most significant factors that can impact your Cibil score. If you've missed payments or paid bills late, it can negatively impact your credit score. Late payments stay on your credit report for up to seven years and can significantly impact your score during that time.
High Credit Utilization: Credit utilization is the amount of credit you're using compared to your total credit limit. If you're using a large percentage of your credit limit, it can negatively impact your Cibil score. Lenders view high credit utilization as a sign of financial stress and may be less likely to approve you for credit.
Closing Old Credit Accounts: Closing old credit accounts can negatively impact your Cibil score, as it reduces the average age of your credit accounts. Lenders view a long credit history as a sign of creditworthiness and may be more likely to approve you for credit if you have a long credit history.
Applying for Too Much Credit: Every time you apply for credit, it results in a hard inquiry on your credit report, which can lower your Cibil score. If you apply for credit too often, it can signal to lenders that you're desperate for credit and may be a riskier borrower.
Defaulting on Loans or Credit Cards: Defaulting on loans or credit cards can significantly impact your Cibil score. It signals to lenders that you're a risky borrower and may not be able to pay back your debts. Defaulted accounts can stay on your credit report for up to seven years and can significantly impact your credit score during that time.
Identity Theft or Fraud: Identity theft or fraud can impact your Cibil score if someone opens accounts in your name or uses your credit card without your permission. Make sure to monitor your credit report regularly and report any unauthorized activity to the credit bureau.
In conclusion, your Cibil score is dying because of various factors such as late payments, high credit utilization, closing old credit accounts, applying for too much credit, defaulting on loans or credit cards, and identity theft or fraud. By monitoring your credit report regularly, paying your bills on time, keeping your credit utilization low, and avoiding applying for too much credit, you can improve your Cibil score and maintain good financial health.