Boosting your credit score after a slip-up

Missing an EMI payment can feel like an unexpected rain cloud on a sunny day. Your financial confidence might get drenched, especially if you realise the impact it has on your CIBIL score. However, there is a silver lining: mistakes happen, and they can be rectified. By understanding the gravity of missing an EMI payment and acting promptly, you can set things right.

Understanding CIBIL score

Your CIBIL score is a numeric representation, ranging between 300 and 900, reflecting your creditworthiness. It is derived from your credit history and debt repayment habits. The closer you are to 900, the better. Ideally, scores above 750 are considered good. But do not lose heart if you have slipped; there is always room for improvement.

Impact of EMI payments

Consistent EMI payments play a pivotal role in maintaining a stellar CIBIL score. Lenders regard it as a sign of your financial discipline. When you miss or delay an EMI, it indicates potential financial stress or neglect, which could ring alarm bells for lenders. If the question "Does EMI affect credit score" ever crosses your mind, the simple answer is, yes!

Strategies for the perfect CIBIL score

• Track and settle EMI overdue payments promptly: The quicker you clear any outstanding EMIs overdue, the better. Proactivity is key.

• Monitor your CIBIL score: Awareness can prevent further dents. Services like Axis Bank’s “Check Your Credit Score” lets you monitor your score, offering insights on areas that might need attention.

• Limit credit utilisation: Try to utilise only 30-40% of your credit limit. It shows lenders you are not overly reliant on borrowed funds.

• Diversify your credit: A mix of credit - both secured (like Home Loans) and unsecured (like Credit Cards or any Personal loan) - can enhance your credit profile. This shows lenders your adeptness in managing multiple credit forms.

• Pay your Credit Card bills on time: Just as diligent you should be about EMI payments, be mindful of your Credit Card bill payment. Timely settlements can positively influence your CIBIL score.

• Seek professional advice: Consider consulting credit counselling agencies. Their expertise can offer you tailored strategies based on your financial profile.

[Also Read: How To Improve Your Credit Score?]

Leveraging CIBIL score data

In the journey of credit repair and maintenance, it is invaluable to have reliable tools at your disposal. Axis Bank's Check Your Credit Score service is more than just a number-checker; it acts as a financial compass. By regularly using this tool, you gain insights into your CIBIL score's health and receive tailored advice based on your unique credit behaviour.

Axis Bank also offers resources and services that assist in making informed financial decisions. Their suite of online tools facilitates actions like paying EMI online, ensuring that you stay on top of your dues. Moreover, the bank's transparent communication about EMI Repayments and other credit-related services ensures you are never in the dark about your financial standing. If by chance you have missed your EMI payments on the due date, you can make payments using the BBPS service using any of the preferred UPI platforms.

In essence, with Axis Bank's robust features, you are equipped to proactively handle and enhance your CIBIL score, putting you back in the driver's seat of your financial journey.

The aftermath of a missed EMI

It is important to understand the consequences of missing an EMI payment. Your future access to credit might become limited, or you could face higher interest rates. Establishing trust with the lender becomes a little harder thereafter. But remember, one missed EMI does not define your entire financial journey. What defines you is how you bounce back.

Summing up

Everyone has financial hiccups. A single missed EMI payment is not the end of your credit journey; it is just a minor bump. By staying informed, using tools like the one provided by Axis Bank, and adopting responsible financial habits, you can revive your credit health. Remember, financial discipline today promises a brighter, more secure tomorrow.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision