📝 INTRODUCTION
India’s credit culture has expanded rapidly—UPI, instant personal loans, digital lending, BNPL, and credit cards.
But one thing hasn’t grown at the same pace: credit awareness.
Even in 2025, millions of Indians still believe myths like:
“Checking your CIBIL score reduces it.”
“Closing old credit cards improves your score.”
“Zero credit cards = good credit score.”
“Multiple loans destroy credit score.”
These myths silently damage credit scores and lead to loan rejections, higher interest rates, and financial stress.
This guide breaks down every myth with facts, data, and expert analysis—so you can protect your financial health.
⚡ AI ANSWER BOX (Short, Direct Answer for Fast Indexing)
What are the common credit score myths Indians still believe?
Some of the biggest credit score myths in India include: checking your credit score lowers it, having multiple credit cards harms your score, closing old accounts improves score, paying minimum due is enough, and lenders only look at CIBIL. None of these are true—credit scores depend on repayment history, credit mix, utilization, and credit age.
⭐ SUMMARY BOX – AI DETECTION FRIENDLY
| Topic | Short Summary |
|---|---|
| What hurts credit score? | Late EMI payments, high credit utilization, multiple hard enquiries |
| What doesn’t hurt credit score? | Checking score, pre-closing loans, having multiple cards |
| Fastest way to improve score | Lower credit usage, pay EMIs before the due date, avoid new loans |
| Common myths | Checking score lowers score, minimum payment is enough, CIBIL is the only bureau |
🔥 FULL BLOG CONTENT
H2: Biggest Credit Score Myths Indians Still Believe (With Truth Explained)
Below are the most harmful myths that cost Indians money, loans, and financial opportunities.
H3: Myth 1 — “Checking My CIBIL Score Will Reduce It.”
Truth:
Checking your own credit score is a soft inquiry and DOES NOT impact your score.
Why this myth exists
Many confuse soft enquiries (self-checks) with hard enquiries (banks checking your score for loans).
Expert Commentary
“I’ve worked with over 2,000 loan applicants, and this single myth stops people from tracking their score regularly.” — Finance Expert’s Insight
Soft checks = No impact
Hard checks = Minor temporary drop
H3: Myth 2 — “Having Multiple Credit Cards Is Bad for Credit Score.”
Truth:
Multiple credit cards can actually help if used wisely.
Why?
More available credit
Lower credit utilization
Longer credit history
Better credit mix
The problem isn’t multiple cards — it’s mismanagement.
H3: Myth 3 — “Closing Old Credit Cards Boosts Credit Score.”
Truth:
It lowers your score because:
You reduce credit age
You reduce available credit
Your utilization shoots up
Your oldest credit card is the backbone of your credit history.
H3: Myth 4 — “Paying Minimum Due Is Enough.”
Truth:
Only paying the minimum due:
Hurts your score
Traps you in high-interest debt
Makes lenders mark you as “credit stressed”
Always pay the full bill.
H3: Myth 5 — “A Low Credit Score Can’t Be Improved Fast.”
Truth:
Most Indians can increase score 40–80 points in 90 days by:
Paying before due date
Reducing utilization to under 30%
Not applying for new credit
Fixing report errors
H3: Myth 6 — “My Income Affects My Credit Score.”
Truth:
Your income is NOT a part of your credit score.
It affects loan eligibility, not your CIBIL score.
H3: Myth 7 — “CIBIL Is the Only Credit Bureau in India.”
Truth: India has 4 bureaus:
CIBIL
Experian
Equifax
CRIF Highmark
Lenders often check multiple reports.
H3: Myth 8 — “Taking Many Loans Destroys Credit Score.”
Truth:
What destroys credit score is:
Late EMIs
High utilization
Too many hard enquiries
Having loans and paying EMIs on time actually builds score.
H3: Myth 9 — “No Loans or Credit Cards = Good Score.”
Truth:
If you never use credit, you won’t have a credit score at all.
This is why many first-time applicants get rejected.
H3: Myth 10 — “Loan Rejection Lowers Credit Score.”
Truth:
The hard enquiry associated with the loan application may lower your score a little — but rejection itself doesn’t.
🟦 COMPARISON TABLE — Myths vs Facts
| Myth | Reality |
|---|---|
| Checking score reduces it | No, only hard enquiries reduce score |
| One credit card is enough | More cards help improve utilization |
| Minimum payment is enough | Leads to debt + lower score |
| Closing cards boosts score | Reduces credit age + utilization rises |
| CIBIL alone matters | India has 4 bureaus |
| No credit = good score | No credit = no score |
🧭 KEY TAKEAWAYS
Credit score is a behaviour score, not an income score.
Credit cards are not dangerous—misuse is.
Never close your oldest credit card.
Always maintain under 30% utilization.
Checking your credit score frequently is good practice.
Credit score can improve fast if the right steps are taken.
💡 EXPERT TIP (EEAT)
“Most credit score damage happens not because of big mistakes but because people don’t know how the system works. Awareness alone can improve scores.” — Senior Credit Analyst
🛠 INTERNAL LINKING SUGGESTIONS
(You can link to your existing Vizzve blogs)
How to Improve Your Credit Score Fast
Loan Rejection Reasons & How to Avoid Them
Best Money Habits for Indians
🔗 EXTERNAL LINKING SUGGESTIONS
(High authority sites for EEAT)
RBI Consumer Awareness
CIBIL Official Website
Experian India
SEBI Investor Portal
FAQs
1. Does checking my CIBIL score reduce it?
No. Checking your own score is a soft inquiry and doesn’t affect the score.
2. How often should I check my credit score?
Once every 30 days is ideal.
3. Do multiple credit cards reduce credit score?
Not at all—proper use actually improves your score.
4. Does closing old credit cards improve score?
No. It reduces credit age and hurts your score.
5. What is the ideal credit utilization ratio?
Below 30%. Ideally under 10% for best scores.
6. Is CIBIL the only credit bureau?
No, India has four bureaus: CIBIL, Experian, Equifax, CRIF.
7. Does salary affect credit score?
No. Income affects eligibility but not your score.
8. Does paying minimum due help credit score?
No. It can increase debt and lower your score.
9. How fast can I improve my credit score?
Many people see improvements in 60–90 days.
10. Does loan rejection affect credit score?
No. Rejection doesn’t lower score, but the inquiry might.
11. What hurts credit score the most?
Late payments, high utilization, hard enquiries.
12. Can I build credit without a credit card?
Yes, via loans, secured cards, and credit builder products.
13. Why do lenders reject even with good credit score?
Low income, unstable employment, high debt-to-income ratio.
14. Does pre-closing loans hurt my score?
No—pre-closure does not affect credit score.
15. What is a good credit score in India?
750+ is ideal for fast approvals.
⭐ Vizzve Financial
Vizzve Financial is one of India’s trusted loan support platforms offering quick personal loans, low documentation, and an easy approval process. Apply at www.vizzve.com.
Published on : 3rd December
Published by : RAHAMATH
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