Introduction
Your credit score (CIBIL) is one of the most crucial numbers that affect your financial life. Whether you’re applying for a loan, credit card, or even renting a house, your score can make or break your chances.
But in India, many people still believe in false information and outdated myths about credit scores. This can lead to unnecessary financial stress or even loan rejections.
So in this article, we bust the Top 10 Credit Score Myths that Indians still believe in 2025 — and tell you the truth backed by real credit logic.
🔟 Top Credit Score Myths (Busted)
1. Myth: Checking my own credit score will reduce it
Truth:
This is one of the most common and harmful myths. When you check your score yourself (called a soft inquiry), it does NOT affect your score. Only when a lender pulls your report (called a hard inquiry) does it have a small impact.
✅ Tip:
Regularly check your credit report on sites like CIBIL or Experian to monitor and fix errors.
2. Myth: I don’t use credit cards, so I’ll have a high credit score
Truth:
Not using any credit means there’s no data for lenders to assess your creditworthiness. A credit score is built by showing responsible credit usage, not by avoiding it altogether.
✅ Tip:
Use a credit card wisely and pay bills on time to build a good credit history.
3. Myth: Paying the minimum due on my credit card is enough
Truth:
Paying just the minimum amount due keeps your account from going delinquent, but it leads to interest piling up and hurts your credit health in the long run.
✅ Tip:
Always pay full due amount to avoid high interest and show responsible repayment.
4. Myth: My income affects my credit score
Truth:
Credit score is not affected by your salary or income level. It is purely based on your credit behavior — repayments, credit usage, account age, etc.
✅ Note:
While income doesn’t affect the score, lenders may consider it separately during loan approval.
5. Myth: Closing old credit cards improves credit score
Truth:
Wrong! Closing your old cards actually lowers your credit age (account history), which can reduce your score. It also increases your credit utilization ratio.
✅ Tip:
Keep older cards active with small purchases and timely payments.
6. Myth: A low credit score means I’ll never get a loan
Truth:
Even with a low score, you may still get loans — but at higher interest rates or with added security (like a guarantor or collateral). Some NBFCs and fintech platforms offer loans to low-score individuals.
✅ Tip:
Focus on rebuilding your credit by making regular payments and reducing debt.
7. Myth: My credit score will improve instantly if I pay all dues
Truth:
Paying off your dues is excellent, but credit score improvement takes time. The score updates monthly, and consistent good behavior is what drives it up.
✅ Tip:
Stay patient. Combine on-time payments with low credit utilization for long-term results.
8. Myth: A single missed payment won’t hurt my score
Truth:
Even one missed EMI or credit card payment can lower your score by 50–100 points, especially if your credit history is short.
✅ Tip:
Set up auto-pay or reminders to ensure zero delays in repayments.
9. Myth: All credit bureaus have the same score
Truth:
Different bureaus (CIBIL, Experian, CRIF, Equifax) use different algorithms, so scores may vary slightly. But the credit behavior is common to all.
✅ Tip:
Check your score on multiple platforms and track the average trend.
10. Myth: I can’t improve my credit score if it’s already bad
Truth:
This is false. Anyone can rebuild their score with time, discipline, and smart credit habits. Even people with loan defaults have bounced back.
✅ Action Plan to Improve CIBIL Score:
- Pay all bills on time
- Reduce credit card usage to below 30%
- Don’t apply for too many loans at once
- Keep old accounts open
- Dispute any incorrect info on your credit report
🧠 Credit Score Factors (Weightage Breakdown)
| Factor | Approximate Weight |
|---|---|
| Payment History | 35% |
| Credit Utilization Ratio | 30% |
| Credit History Length | 15% |
| Types of Credit Used | 10% |
| New Credit Inquiries | 10% |
❓ FAQs – Credit Score Myths India 2025
Q1. Is 750 a good credit score in India?
Yes, a score of 750+ is considered excellent and increases your chances of getting loans with lower interest.
Q2. Can I get a home loan with a score of 650?
It’s possible, but expect higher rates or need for a guarantor. Try to improve to 700+ for better offers.
Q3. Will paying a settlement improve my score?
A settled account stays on your report for 7 years and can hurt your score. It’s better to negotiate and pay in full if possible.
Q4. Does UPI loan or BNPL affect credit score?
Yes, if reported to credit bureaus. Missed payments or defaults can reduce your score.
Q5. Can students build a credit score?
Yes, by using a secured credit card or add-on card responsibly.
✅ Conclusion
In 2025, your credit score is more important than ever — it impacts not just loans but also insurance premiums, job approvals, and even property rentals. Don’t fall for common myths and take control of your financial health with the right knowledge.
Now that the myths are busted, it’s time to act smart and start building or improving your CIBIL score today!