I missed EMI payment last month. How badly will it affect my CIBIL score?

The negative impact of missed EMIs on your CIBIL score depends on multiple factors, including:

• Existing credit score of the borrower
• The type of the loan borrowed
• The duration of the delay
• The history of repayment
• Whether the payment crossed 30 days overdue

CIBIL score is one of the primary indicators of your creditworthiness. The score is formed by weighing in multiple factors including repayment history of a borrower. When you fail to pay EMIs, lenders report this to the bureaus, signalling financial stress on your end. Consequently, it leads to a drop in your credit score and creditworthiness.

• Pay the due as soon as possible to lower the long-term impact. The longer the delay, the stronger the impact.
• Avoid further failed or delayed repayments. Pay all future EMIs on time to rebuild your CIBIL score gradually.
• Review your credit report to ensure:
  • Payment status is updated correctly
  • No incorrect overdue amount is shown
  • Closed dues are properly reflected

Improving your CIBIL score requires consistent and disciplined efforts. To improve your score, you should:

Even though the fall may be near-instant, recovery may take long and requires you to be prudent with your credit obligations.

Some of the best practices to avoid late payments include:

• Setting auto-debits & reminders
• Keeping sufficient funds in your bank account
• Maintaining emergency funds to avoid cash-strapped situations
• Using apps like Paisabazaar for bill payments, which sends timely reminders
• Checking your credit report on a regular interval to ensure everything included is correct and up-to-date.