Do you think if you change your job then it will impact your CIBIL score? If you get married and your spouse has a low credit score then will your score also dip? Will checking your own score lower it?
Credit rating is still a concept that is not understood very well and so there might be a few myths or wrong impressions that may be associated with it. Here we talk about seven such things which one may assume to impact your credit score but they do not:
1. Your Spouses Score: It is important to remember that each individual whether married or single has a separate credit score which is not linked to the score of another individual even if that individual is your spouse. Thus if one marries a person who has a lower score or for that matter a higher score, the score of the partner will have no bearing on the spouse’s score. Each individual will continue with their own credit history and their histories will not merge or impact each other’s scores in any way.
2. Lower Income Levels: CIBIL score is based on how one treats their debt and the rating is a statistical assessment of an individual’s credit health. The scores are not in any way affected by your income levels; as long as you pay your dues on time, do not over-leverage yourself, and do not display credit hungry behaviour you will have a healthy score. It is possible that someone who earns more than you may have a lower score owning to their irresponsible attitude towards debt and the converse may also be true.
3. Your Bank Balance: Just like income levels do not impact the credit score, your bank balance or net worth also has no bearing on the credit rating. As long you pay your EMIs and credit card bills on time, whether you have a big bank balance or a small balance is of no consequence to score calculation.
4. Checking your own Credit Score: Being credit healthy is important, thus keeping in line with this thought, you should assess your credit health from time to time. So how do you do this? You do this by requesting your credit report periodically. Checking your own score is known as a soft inquiry and unlike a hard inquiry (when a bank asks for your credit report) it is not reported in the CIR and does not lower it. Checking your CIR from time to time will save you from the need to apply for a loan for a low CIBIL score when you need funds and will also let you keep an eye on your credit health.
5. Use of Debit Card: Your debit cards are linked to your bank accounts and whenever you use the card the amount is directly debited from the savings account so this usage is not considered as credit for the user. Thus the use of debit cards unlike the use of credit cards is not considered when the CIBIL score is calculated. Overuse of credit cards can make you appear credit hungry and can lower the rating but nothing like this will happen when using the debit cards as the usage is linked to the amount one has in their savings account.
6. Educational Qualifications: Your CIR has information about your personal details, contact information, employment information, and so on. However, this information is not used when scores are calculated. Just like that your educational qualifications have no bearing on the score. You may be a graduate, postgraduate, or neither but they only thing that impact the score is how you treat your debt and nothing else.
7. Utility Bill Payments: So far in our country payment or nonpayment of utility bill payments is not included when credit scores are calculated. In some more credit-driven economies payment records of the user’s mobile, electricity, and water bills, etc. are considered when the score is calculated. This may happen in India in the future but so far you need not worry about this impacting your scores.