Types of Financial Transactions That Can Harm Your Credit Score or CIBIL Score

Do you ever care about how you spend your money with your credit cards? The chances for a yes are balanced with a no. Most of us think about the need for credit cards when purchasing. Yes, a credit card is surely a helping hand at the time of purchase and for getting approved for a loan. 

Now, how could a credit card help in getting a loan? When these credit cards are utilized properly, financial institutions check the customer’s credibility through an algorithm called the CIBIL score. A Wishfin CIBIL Score app could help you check the ranking. 

When these CIBIL scores, also called credit score reports, are in a good ranking, it shows the lender that the customer can repay the loan and is not in any debt. Paytm can be considered a good CIBIL Score app. 

Can a CIBIL Score app help identify whether to improve money spending? Yes, it can! A CIBIL Score app shows your ranking, and if the range is above 700, it is a good ranking and indicates no need for improvement. 

Wishfin CIBIL Score

What is the Wishfin CIBIL score? Wishfin is the official financial and technological partner of TransUnion CIBIL. This company offers a login for CIBIL to check the CIBIL scores of the customers.

Factors that affect the CIBIL score through your transactions

Here are some of the factors that can affect your credit score:

1. Multiple loans: When you carry more than a single loan, it indicates that you are in increased debt. Due to this, the financial institutions from where you sent the application for a loan might get rejected. This may show that you need to be more capable of repaying the loan. 
2. Closing of credit cards: Carrying multiple credit cards and closing anyone among them could affect your credit score. Your payment history is crucial for getting approved for a good CIBIL score. After closing your credit card, your overall available credit will be recovered, and the banks could never get it backed up. 
3. Delayed payment: A delay in paying back your purchases or loans could show that you are careless about your purchases. There is a possibility in showing that you may be in great debt because you cannot pay back the loan or the purchase you made. 
4. Purchasing Higher: Purchasing huge items could negatively impact your credit score. 
5. Withdrawal of money: When you withdraw your money through a credit card, it could create huge interest rates.
6. Paying only the Minimum amount on due: Re-paying only a minimum amount will create an outstanding balance. And these outstanding balances could increase interest rates and put you in a debt trap. 
7. Requesting more credit limits: When you request more credit limits, the bank organizations will bring out a hard inquiry. The only impact your credit score will face through this inquiry is negative. 
8. Unmaintained credit mix: While carrying multiple loans, your credit score could have a negative effect. But if both the loans, secured and unsecured, are handled with a balance, you will be considered good in repaying the loans. Hence, it can be a plus point for you.
9. Track your credit score ranking: Sometimes, keeping an eye on your credit score reports could save you from getting denied for the loan. Your credit score reports could sometimes show faulty information. Hence, checking your credit reports in a gap of 6 months is advised.
10. Outstanding debt: When you pay a minimum amount on the due, it creates an outstanding debt and could lower your credit points. It causes a poor report on credit scores.

Conclusion 

Whenever you swipe your credit card for a purchase, think if it is properly utilized. The factors shown above clearly indicate that when a credit card is used for on-time payments, it saves the customer from bad debts and the risk of getting rejected for the loan. Outstanding debts can also be exempted from your financial life to keep it healthy. 

The Wishfin CIBIL Score App is a great tool to help you track your progress. The app allows you to view your current score and see how it compares to the national average. You can also set goals and receive tips on how to improve your score. The app is free to download and use, and it is available for both Android and iOS devices.