Top 5 Common Credit Score Mistakes in India to Avoid

Your credit score can make or break your financial plans, whether you’re applying for a personal loan or a new credit card. In India, where financial access is rapidly becoming digital and credit-driven, your credit score is your reputation. Yet many people unknowingly make credit score mistakes in India, that keep their scores stuck and their borrowing power limited.

They’re simple, avoidable credit score mistakes that we make every day, often without even knowing it. The good news? Most common credit errors are fixable, and you can start improving your score today.

Let’s break down the 5 most common credit score mistakes in India and show you how you can fix them today.

1. Ignoring Errors on Your Credit Report

This is probably the #1 mistake when it comes to credit score mistakes in India. Did you know that even a single wrong entry, a wrongly reported late payment, or an old loan account still showing as open can damage your credit score?

Why It Happens:

Outdated account information
Banks not updating the payment status
Identity mix-ups (more common than you think!)
Duplicate accounts or phantom loans

How to Fix It:

Download your credit report from CRIF, CIBIL, Experian, or other bureaus.
Spot any mistakes? Raise a dispute immediately.
Most bureaus resolve disputes within 30 days.

Key Tip: Use FixMyScore to identify errors instantly. Our AI-powered tools help you scan your report and flag discrepancies so you don’t have to dig through pages of complex data.

2. Using Too Much of Your Available Credit Limit

Your credit utilization ratio is the percentage of your credit limit you’re using. If you’re constantly maxing out your credit cards, lenders view that as a red flag, even if you pay them off in full.

Bad Credit Habits to Avoid:

Swiping your credit card to its limit every month
Carrying high balances without repayment
Having only one credit card with a low limit

The Ideal Strategy:

Keep your credit utilization under 30%. So, if your card limit is ₹1,00,000, make sure your balance doesn’t exceed ₹30,000 at any point in the month.

Key Tip: If you’re always close to your credit limit, request a limit increase or spread expenses across multiple cards.

3. Missing or Delaying Credit Payments

You missed a credit card payment. Or it’s five days late. You think it won’t matter much, but payment history is 35% of your credit score—it’s the single most important factor. Even one missed payment can drop your score by 100+ points.

Why It Happens:

Forgetting due dates
Waiting until the last day to pay
Not having funds in your account on auto-debit day

The Fix:

Aim to pay the full statement balance before the due date
Set up auto-debit for credit cards and loans
Schedule payment reminders in your calendar
Pay at least the minimum due to avoid late penalties

With FixMyScore, you can:

Get timely alerts before payment due dates
Track upcoming / overdue EMIs and card bills in one dashboard
Receive payment strategy tips based on your spending behavior

4. Closing Old Credit Card Accounts

You had an old credit card for years. You paid it off, so you closed it. Sounds responsible, right? But closing old credit cards can actually hurt your credit score.

Why It’s a Mistake:

It shortens your credit history (which makes up to 15% of your credit score)
It increases your utilization ratio (by reducing total credit available)
It removes a long-standing positive account

What To Do Instead:

Keep old cards open, even if you don’t use them much
Use them for small recurring bills like subscriptions
Downgrade to a no-annual-fee card if the charges are a concern

5. Applying for Too Many Credit Accounts at Once

Every time you apply for a credit card or loan, lenders do a hard inquiry on your credit report. Multiple hard inquiries in a short period signal to lenders that you’re desperate for credit, which increases their risk assessment of you. Each hard inquiry can lower your score by 5-10 points.

Common Credit Errors:

Applying for multiple loans just to “see who approves”
Taking credit card offers from every bank calling you
Shopping for loans with multiple NBFCs at once

Smart Fix: Plan your credit needs in advance. Know exactly which cards or loans you need before you apply, then apply strategically over time. Space out credit applications by 6 months.

Fixing Credit Score Mistakes Is Not Hard – If You Start Today

These five common credit score mistakes in India are completely fixable. Whether it’s disputing errors, lowering your utilization, automating payments, keeping old cards open, or spacing out applications, each step moves you toward a healthier financial profile.

Start by:

Paying bills on time
Keeping credit usage low
Tracking your report regularly
Fixing errors as soon as they appear

With the right habits and the right help, your score can climb steadily, and open doors to better financial opportunities.

How FixMyScore Makes It Easy to Fix Credit Score Mistakes

FixMyScore is India’s leading AI driven app designed to help you detect, understand, and fix credit score mistakes quickly and easily. Our intelligent platform monitors your credit profile in real time, identifies mistakes holding you back, and provides personalized recommendations to boost your score.

Whether you’re trying to bounce back from a low score or just want to keep things on track, FixMyScore is your credit score repair companion.

FAQs

1. Why Your Credit Score Matters More Than You Think

Your credit score does far more than decide if a bank will lend to you. A strong score means better interest rates on loans, easier access to credit cards, and lower insurance premiums. Many people realise this only after making common Credit Score Mistakes in India: missing EMIs, maxing out credit cards, or applying for too many loans at once. These habits weaken your CIBIL score and make future borrowing costly and difficult.

By staying disciplined, paying on time, and reviewing your credit report regularly, you can spot issues early and protect your long-term financial flexibility.

2. How is a credit score calculated in India?

In India, credit scores are calculated using five main factors:

Payment History (35%): Whether you pay your bills on time
Credit Utilization (30%): How much of your available credit you’re using
Credit History Length (15%): How long you’ve been using credit
Credit Mix (10%): Having a mix of credit types (credit cards, loans, etc.)
New Credit Inquiries (10%): How many new credit accounts you’ve recently applied for

Understanding these components helps you make smarter financial decisions to improve your score.

3. What is a good credit score in India?

Credit score ranges in India:

300-549: Poor credit score
550-649: Fair credit score
650-749: Good credit score
750-900: Excellent credit score

A score above 750 is considered excellent and gives you access to the best interest rates and loan approvals. Most lenders prefer scores of 700 or above.

4. What are the most common credit score mistakes in India?

The five most common credit score mistakes are:

Ignoring errors on your credit report
Using too much of your available credit limit (high utilization)
Missing or delaying loan and credit card payments
Closing old credit card accounts
Applying for too many credit accounts at once

Each of these mistakes can significantly impact your score, but the good news is that they’re all fixable with the right approach and tools like FixMyScore.

5. How often should I check my credit report?

Ideally, check your credit score monthly and review your full report every 3-4 months.

6. How long does it take to improve a credit score after fixing mistakes?

It can take anywhere from 30 to 90 days, depending on the issue and your corrective actions.

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5 Common Credit Score Mistakes in India You Can Fix Today