Credit scores are one of the most important ways to figure out if we are eligible for loans and credit cards, and they are also the basis for risk-based pricing models. Since your credit repayment history is said to have the most impact on your credit score, we often don’t pay enough attention to the other important factors or financial moves that can affect our credit score.

Here are some lesser known things that could hurt your bajaj finserv CIBIL score, even if you pay your loan EMIs and credit card bills on time and regularly:

Failure to keep the amount of credit used below 30%

This ratio shows how much of your credit limit is still available compared to how much you still owe on your credit card. Because a credit utilisation ratio of more than 30% is often seen as a sign of credit hunger by lenders, credit bureaus tend to lower your HDFC cibil score by a few points if you go over this threshold.

So, it is suggested that you spend no more than 30% of the total amount you are allowed to spend on your credit card. If you regularly spend more than this amount, you might want to ask your card issuer to raise your credit limit or apply for a second credit card. If you do this, your total credit limit will go up, which will lower your credit utilisation ratio as long as you don’t spend more with your card because your credit limit went up.

Multiple requests to lenders for credit in a short amount of time

If you apply for a loan or credit card, the lender will get your credit report from the credit bureaus and use it to figure out if you are a good credit risk. Lender-initiated credit report checks are called “hard inquiries,” and each one lowers your bajaj finserv cibil score by a few points on average.

Also, if you ask several lenders directly about your credit score in a short amount of time, it could cause your credit score to drop faster, which could hurt your chances of getting a loan or credit in the future. Decrease his HDFC CIBIL score in a short time

Instead of asking several lenders directly about your credit, you could visit online financial portals to find the best credit option and lender for you based on your credit score, income, and any other relevant factors. Even though these marketplaces also check your credit report, the credit agencies call these requests “soft inquiries,” and they don’t affect your bajaj finserv cibil score because of this.

There are more unsecured loans in the credit mix.

Your credit mix is how much of your debt is secured and how much is not. As a result of the fact that lenders often prefer borrowers with a higher proportion of secured loans, like home loans, loans against property, and car loans, credit bureaus tend to do a rating of such borrowers more favourably on their credit reports. People with a lot of unsecured debt, like personal loans, loans against credit cards, and so on, should try to keep their debt-to-credit ratio more even if they want to improve their HDFC cibil score. You can do this by either paying off your unsecured loans early or replacing them with secured loans, like a top-up home loan if you already have a home loan, or by taking out a gold loan, a loan against stocks, or some other kind of loan.

Not keeping track of the payment on a loan you co-signed or guaranteed

Co-signing or putting your name on a loan is a big responsibility, just like getting an extra credit card. When you co-sign a loan or act as a guarantor, you are both responsible for making sure the loan is paid back on time. The same thing would happen to your credit score if you paid that debt late or didn’t pay it at all. So, keep an eye on the repayments of any loans you co-signed or guaranteed on a regular basis to make sure payments are made on time and to keep your bajaj finserv cibil score from being hurt by the primary borrower’s bad financial decisions.

Errors on a credit report

Credit reports have information from lenders and credit card companies about your credit history. The credit bureau uses this information to figure out your credit rating. Your HDFC cibil score can go down if your lender or credit bureau makes a mistake or gives you false information, or if they do something even worse, like commit fraud. Because of this, it is very important to check your credit report often, preferably at least once a month. This would help find any differences and report them to the credit bureau and lender as soon as possible, so the situation could be fixed as soon as possible. Under certain circumstances, every customer can get at least one free credit report from each of the four credit bureaus once a year. Instead, customers can get a free credit report and updates on it every month from online financial marketplaces.

Throwing out old credit cards

One of the most important things credit bureaus look at when figuring out your bajaj finserv cibil score is the average length of your credit history. This is also called the age of your credit history. Keep your older credit cards so that your average length of credit history stays the same. This is important because lenders prefer people with a longer average length of credit history. When you close an older credit card, not only does the average age of your credit history go down, but so does your total credit limit. This makes your credit use ratio go up, which is bad for your credit score.

So, it’s best to keep your older credit card. If you have a lot of credit cards and need to close some of them, try to close the newer ones instead of, the older ones.