Credit Score – Myths

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CIBIL aims to bring in more transparency to the loan approval process in the country, in that customer now have an understanding of the seminal factors which lenders analyse to gauge creditworthiness. CIBIL reports, generated on a monthly basis (as mandated by the RBI), help lenders evaluate and approve or reject loan applications, as the case may be. However, there are several myths associated with CIBIL which need to be busted.

Some of the common myths associated with CIBIL are the following:

  1. CIBIL maintains a record of defaulters
  2. Being a co-borrower has no impact on my credit score
  3. CIBIL is meant to support banks and financial institutions only
  4. CIBIL is fully authorized to make corrections in individuals’ credit report
  5. Credit score will be excellent if I do not have any credit cards or loans
  6. Low CIBIL scores damage one’s credit standing for keeps
  7. CIBIL scores are affected by assets/investments
  8. CIBIL scores are the only determining factor for evaluating loan application
  9. The negative accounts on my CIBIL report purge after 7 years and have no impact on my credit score
  10. Applying for loans left, right and centre is bad for your credit score
  11. Paying in cash for my purchases (rather than using my credit card) will help me build my credit score
  12. Zero credit is ideal

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