5 Things Destroying Your Credit Score 🤯 And You Didn't Know 🤔

What if I tell you frequently changing houses could be one of them? 😯

❓Did you know, your potential employer might ask you for your credit score 😵

Your potential in-laws might also ask for it (for sure, if they are our subscribers) 😆

So you need to have a good credit score 🤨

You might be destroying it even though you don’t know you are 😳

With my practical experience of dealing with bankers and clients, here are 5 things that destroy your credit score and things to take care of 👇🏻

1. Changing Salary Account where your EMIs are set for Auto-Debit
   
   ”Why will I even change my Salary Account?”
   
   Your new employer might ask you because of their tie-up with a different bank
   
   Yes, this does happen!
   
   What if SBI pays you just 3% interest but any other government Bank pays you 6% on saving account balance?
   
   There can be many reasons.
   
   I’ve seen many of my past clients doing this thing. And then they forget to maintain the balance required for their EMIs
   
   So, when you change a salary account. Have sufficient money for at least 3-6 EMIs always and change your EMI auto-debit mandate account simultaneously
   
   This tanks your CIBIL for no reason but negligence.
   

2. Having Multiple Addresses With Different Banks

   
   Many people, who keep on changing their houses frequently, get a new bank account opened every time with a branch nearby
   
   Say you have 5 bank accounts, with 5 different banks, where you have 5 different addresses

   
   Based on my discussion with Bank managers, this also drops your CIBIL to an extent
   

3. High Credit Utilization Ratio

   
   ”What’s that?”
   
   Say, you have been sanctioned a credit card limit of INR 1 Lakh
   
   You spend INR 60,000 during every cycle (say, 40 days) and that’s your outstanding amount too
   
   So the Credit Utilization Ratio is 60%
   
   Credit Utilization Ratio = (Credit outstanding or used / Credit Limit) * 100
   
   Now ideally, this ratio should be within 35%
   
   Otherwise, banks will see you as a credit-hungry person and someone who has to rely on banks for his / her day-to-day needs
   
   The thought that the day you get laid off or are out of business, will trouble banks
   
   Thus, in such a case, they don’t give you credit
   

4. Not Setting an Auto-Debit Mandate for Loan EMIs and Credit Card Dues

   
   While most banks always get an auto debit mandate signed by customers for Loan EMIs
   
   Be it a Personal Loan or Home Loan, they get an ECS mandate done
   
   In case they don’t ask them to set an auto-debit mandate for your EMIs so that you do not have to pay them manually
   
   By far, I’ve never seen any bank that requires you to pay your credit card due on auto-debit
   
   Get your credit card balance on auto-debit as well. Banks offer that facility on an opt-in basis
   

5. Not checking your CIBIL score often
   
   Actor Rajkumar Rao got troubled due to a loan fraud
   
   If you also become a victim of such frauds (god forbid), your CIBIL might get affected as well
   
   For this, you need to check your outstanding in your CIBIL report regularly
   
   It is available for free on CIBIL’s website
   
   And yes, check your credit score 1,000 times a day, it doesn’t affect your credit score
   
   It is a myth that your credit score gets impacted due to generating CIBIL reports often
   
   If you apply for multiple loans often, then it does

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