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Does every financial decision impact your Cibil credit score?

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For a child having money in the pocket is a joy but for an adult it translates into responsibilities. It is true that money related decisions may have an impact on your future. It is not just your investments but also your spending habits that will affect the fate of your assets and liabilities in the coming years. Your spending habits build up your credit score and that helps banks make credit decisions. However, not every financial decision affects your credit score. There are 5 financial decisions which will not impact your Cibil score.


Sunil Nemani was a man who liked to plan his future. When he learnt about credit scores affecting the rate at which you get your home loans, he began assessing how he could help bring up his credit rating.  Now each financial decision he takes is coloured by the fact that it could affect his credit score. What he does not realize is that there are some financial transactions which will not impact his CIBIL rating or his ability to take a home loan. Here are some important ones:

Locking away your credit cards

If you feel you have overspent over the festive season and have decided to lock away your credit card and live a Spartan “cash only” lifestyle for the next 3 months, it will in no way affect your credit score. It is true that regular credit card spending and timely payments increase the score but locking the cards away for a while will not bring down your score either. However, it surely will help bring in some financial discipline.

Using your debit card

Unlike credit card use, using your debit card has no effect on your credit score. Usage of debit card does not build up payment history hence it neither increases your credit score nor decreases it.

A rise or drop in income

If you have suddenly inherited money or got a hefty bonus or even quit your job and taken a month’s sabbatical, all of these will affect your financial standing. However none of these events will affect your credit score in the near term. In the long term, they might affect your score depending on your money management techniques. For instance, if you decide to use the bonus for a down payment for a home instead of enjoying a trip to Europe it will be a wise credit and investment decision.

Getting credit rejection

While applying for credit repeatedly is seen as credit hungry behaviour and can reduce your CIBIL score, whether the credit application is accepted or rejected does not in any way affect your credit score.

Getting married or having a kid

Getting married or having a child is an important life milestone both emotionally and financially. Plenty of changes occur in your financial planning and direction of investments. Often people turn towards safer investments, increase the amount of savings or increase insurance cover. All these important financial decisions, however, do not affect your CIBIL score. Your credit score or CIBIL score depends on your discipline to make regular payments on your bills amongst other factors.

Creditvidya.com is a leading credit management company. All information in this article has been provided by Rajiv Raj, Director & Co-Founder, CreditVidya.

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