Effects of PAN Card on Credit Score

While PAN Card is required for generating your credit score and plays a key role in tracking your credit score...

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15.6L Reviews

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800+Cities across India

Why Check Credit Score on Paisabazaar ?

Check Credit Score from All 4 Bureaus

Track Credit Score Seamlessly Every Month

Read Credit Report in Multiple Languages

How does PAN Card actually affect your credit score?

Your Permanent Account Number (PAN) is a 10-digit unique identifier that is associated with all your financial activities including bank account, credit cards, loans and investments. Credit bureaus like TransUnion CIBIL, Experian, Equifax and CRIF Highmark use PAN to get information about all your financial accounts.

Using PAN, they track:

Your repayment history across different credit products
Number of active accounts on your credit profile
Credit utilisation ratio across all credit cards
Credit Mix

Based on these and other internal factors, they make up your credit score.

PAN has no direct impact on your credit score but it enables the system that calculates your score.

Indirect Impact of PAN on Credit Score

This is what happens under different scenarios:

Incorrect PAN Linked - When wrong PAN is linked to your loans and credit cards, it leads to incorrect data. This means someone else’s loans and cards may be showing on your profile and any missed or delayed payments will impact your profile and could lead to a drop in your credit score
Multiple PANs Linked to Different Credit Accounts - It is illegal to hold multiple PANs in India. Not only is it against the law, multiple PANs linked to different credit accounts leads to fragmented credit history.
No PAN Card - Without PAN, it is difficult for credit bureaus to have a clear picture of your credit profile. This limits your access to fresh credit like cards and loans and, in the long run, you will also face difficulty in building strong credit, especially when you need it the most.

4. PAN Fraud or Misuse - If you allow someone else to use your PAN for taking loans or cards, it can turn out to be your biggest credit mistake. Missed payments and defaults by someone else will have direct impact on your credit score.

What are the best practices?

To ensure positive impact, follow the best practices given below:

If you have multiple PANs, keep one and immediately close others
Always use the same PAN for all accounts, loans, cards and investments
Check your credit report regularly and immediately report any discrepancies like unknown loans/accounts, paid off loans showing active, etc.
Never share PAN casually or allow anyone to use your PAN for availing credit