Common Myths and Misconceptions about CIBIL Score: A Guide to Avoiding Them

The CIBIL score plays a key role in the approval of the loan and the creditability of an individual. The CIBIL score depends on the repayment history. The score will be high if the transactions are done correctly. You can check CIBIL score free online. The CIBIL score app and website can help you track your credit score and report. 

While you check CIBIL score free and try to maintain a high score, you must be aware of some common misconceptions. If you can differentiate between the facts and myths about CIBIL score, you can manage your finances better! 

Common Misconceptions about CIBIL Score 

A few misconceptions regarding the CIBI score affect people’s understanding. Learn these misconceptions and try to avoid them!

It’s about Being Rich or Poor – Misconception!

Poor people might have high CIBIL scores, and rich people might have low CIBIL scores. This all depends on the history of repayment. If the repayments are done correctly, you will see good results when you check CIBIL score free. 

The Repayment History Solely Determines the Credit Score – Misconception!

You might think the CIBIL score is calculated solely based on the repayment history, but it is wrong. Your credit utilization ratio, hard inquiries to evaluate your loan or credit application, credit mix, and many other factors influence your credit score.  

Frequent Credit Score Check Impacts Credit Score – Misconception!

The number of times a person checks their CIBIL record or score on the CIBIL score app or website does not affect it. A few points could lower the score if numerous lenders access the person’s CIBIL record in a short period. It is a good idea to regularly check CIBIL score free. A low CIBIL score can be problematic when you apply for a new credit card or loan, but it’s not always bad. For instance, having no credit history and a low CIBIL score may indicate that you are a debt-free, prudent spender. Before approving a loan, lenders may also consider additional factors, such as income and any offered collateral.

Debit Transactions Influence Credit Score – Misconception!

Your debit card transaction does not affect your credit score because you’re using the money in your bank account and not borrowing any money from anywhere. You can check CIBIL score free after some debit transactions and will see no changes. 

Loan or Credit Card Settlement Removes Bad History Right Away – Misconception!

Even if you shut down or settle the loan account, the repayment history for a specific debt will continue to impact your CIBIL score. Another common myth is that returning a credit card for which you neglected to make a payment will instantly raise your CIBIL score. You can check CIBIL score free and see that the CIBIL score retains that payback history for a very long period. 

Things That Affect Your CIBIL Score

With the misconceptions cleared, let’s get a quick overview of how the CIBIL score works!

  • One key component affecting your CIBIL score is your credit card payback history. Getting a new credit card is not detrimental to your CIBIL score. However, it could affect your CIBIL score if you quickly submit several credit card inquiries to numerous lenders. 
  • Many people think their credit score will suffer if they have more than two credit cards. As a result, they frequently cancel their older credit accounts by returning their unused credit cards. It could inadvertently go wrong since canceling an old credit account would reduce your credit history. 
  • Lenders can better understand your credit behavior if you have a long credit history. However, after careful consideration, you might lose your credit card if you believe you risk losing it or won’t be able to use it responsibly.

How to Increase CIBIL Score?

There are a few ways that you can improve your CIBIL score:

  • Pay your loan EMIs and credit card bills on time.
  • Try to pay in full; if you can’t, pay the bare minimum.
  • Turn on the auto-pay or standing instructions option to ensure you never miss an EMI.
  • Keep your old accounts open because they reflect your long-standing and positive relationship with the bank.
  • Check your credit report frequently to look for, spot, and correct any mistakes or typos.
  • If you discover mistakes in your credit report, immediately contact the bureau and raise the issue.
  • Refrain from applying for multiple credit cards or loans at once.


With a good CIBIL score, a borrower may be trusted to be financially responsible, have paid back previous loans on time, in full, and with interest, and have a steady source of income from a job or company. The borrower is a high-risk client with a poor CIBIL score if they have a history of making late payments on debt or defaulting. The probability that their financial condition and income are unstable implies a high likelihood that the borrower will fail on the loan. 

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