Factors that do not impact your CIBIL Score

A Good Credit Score or CIBIL Score is one of the most important parameters that impact your chances of getting a loan at the best rates. While there are numerous blogs explaining the factors that impact your CIBIL Score, it is also important to know the factors that are not included in your CIBIL Score calculation. One word of caution though! Nowhere does this imply that maintaining credit discipline on these factors is not important and there are multiple reasons to be prompt and disciplined with all your payments.

Let us first understand the factors that do not impact your CIBIL Score

Cheque bounce: Check bounce or ECS bounce is often misconceived as a negative factor for CIBIL. It is important to know that cheque bounces are not reported to CIBIL, only delayed EMI payments are. If you make EMI payment on time, even after the bounce, your CIBIL will remain intact. However, your bank statements and cheques bounces are sometimes evaluated by banks to take a decision to give you a loan especially in the case of an unsecured business loan or SME loan. Hence, cheque bounces can impact your loan eligibility, even not included in credit score calculation.

Inactive Savings Account: Another common fear that a negative or lower savings account balance impacts your CIBIL is totally unfounded. Although it is always advisable to maintain Minimum Average Balance to ensure smooth banking services and avoid paying penalties, an inoperative or negative balance savings account doesn’t alter your CIBIL score in any manner.

Unpaid Utility Bills: Any delay or default in payment of utility bills like electricity bill, water bill, mobile bill, etc. does not impact CIBIL Score. But, it is always advisable to never delay such payments to enjoy uninterrupted services and act as a responsible citizen. Globally utility bills are included in as a parameter for credit score calculation. Lately, similar proposals have been floating in India and it is highly likely that your past utility bill payments records may start getting reflected in your CIBIL Score in the near future.

Checking your CIBIL Score regularly: Ideally, it is advised to check your CIBIL once in every three months. However, you can check your CIBIL as many times as you want, without impacting your CIBIL. 

Your Spouse’s CIBIL: A husband and wife are two different individuals, considered as separate legal entity and hence, their CIBIL Scores are typically insulted from each other. Your spouse’s CIBIL Score is checked only in a few specified situations such as in the case of a joint loan application, business partnership between the two or where one of you has been a guarantor of other’s loan.

In addition to the above, some more factors that do not impact your CIBIL are:
Prepayment of loans or transferring your loan to another bank
Payment track record of rent payments
Any delay or defaults in tax payments
Delay or default in paying to your suppliers or trade partners

In summary, CIBIL Score is indicative based on your past credit behaviour and loan repayment track record. It does not reflect the absolute correct picture of your financial health. While many of the other factors are not included in your credit score calculation, they may still be checked by banks and NBFCs before sanctioning you a loan. Hence, it is advisable to extend your healthy credit behaviour to all your payment irrespective of whether it gets included in CIBIL Score calculation or not.