Know What Kind of Bills Affect Your Credit Score

Are you paying your loan EMIs, credit card debts, or any other loan on time? Because your credit score is considered at this juncture! But do you also know that your credit score can be benefited from timely service and utility payments as well!

Remember that your household bills will not be included in those bills that help build your credit history when evaluated. On the other hand, when you consider what bills can affect your credit score, Indian credit bureaus do not include mobile and utility bills. So, what can the effect of delayed payments be on your credit score?

Effect of Missed or Delayed Payments on Your Credit Rating

Missing even a single payment can reduce your CIBIL score which thereby decreases your creditworthiness. Due to a low CIBIL score, many financial institutions such as banks can reject your loan request after checking your credit score and thereby credit card companies can reduce the approved credit limit on your card.

But is there any way out to help yourself by not even missing on a single payment? Yes! Let us understand how.

What are Different Types of Repayment Defaults?

There are two kinds of repayment defaults – Major & Minor.

  • Minor Repayment Default – If you miss or delay your payments for less than 90 days, then it is considered a minor default. This can affect your CIBIL score temporarily.
  • Major Repayment Default – If you do not make your payment even after 90 days, then your account will be classified as a non-performing asset (NPA). This is considered a major repayment default and many lenders tend to reject loan applications if you default on your payments.

But don’t worry! Thankfully there are a few precautionary steps that you can take to ensure that you are in the safe zone when lenders check your credit scores.

  • Credit History – Many financial institutions such as banks, and non-banking finance companies (NBFCs) maintain your detailed credit history report to check your credit score. With your CIBIL report, the lender can trace back even to the first time you applied for credit. So, if your credit history is positive, it definitely affects your credit score favourably.
    One of the best ways to maintain a healthy credit history is by holding your old credit cards. If you discontinue a credit card, then you will lose the credit score that comes along with it, which can again affect your credit rating.
  • Credit Utilisation Ratio – The credit utilisation ratio is defined as the amount of credit that you should avail of from a given credit limit. This ratio is calculated as a percentage.
    For example: If you are having 3 credit cards, each one has an individual credit limit of INR 1.5 lakh, INR 1 lakh, and INR 50,000 respectively. You will be having a total credit limit of INR 3 lakh. If you have withdrawn INR 60,000 using these cards, then the credit utilisation ratio will be 20%.
    Your creditworthiness will be determined by how low the credit utilisation ratio is. Most lenders prefer those applicants whose ratio is less than 40%. If you want to maintain a healthy credit utilisation ratio, it is better advised not to use up too much of your credit limit.
  • EMI to Income Ratio – Suppose your monthly income is INR 60,000 and the total EMI you pay is INR 20,000. Your EMI to Income ratio will be 33.3%.
    Lenders prefer applicants who have a maximum EMI to Income ratio of up to 40%, which means you at least need 40% of your monthly income to meet your expenses. However, if you are trying to apply for a loan with a co-applicant who has a stable income, then the joint EMI to Income Ratio will be considered.


Timely payments of your loan EMIs, credit card bills, etc. can help you to maintain a good credit score, which thereby enables you to command favourable terms while borrowing loans from the lenders in the future.

So, if  you are planning to build your credit score, one of the best ways is by applying for a personal loan and repaying it timely. But which lender to choose? Opt for a loan from FlexSalary; a loan offering product of a non-banking finance company (NBFC) called Vivifi India Finance Private Limited, which is registered with the Reserve Bank of India (RBI). Because with FlexSalary:

  • It is easy to qualify for a personal loan.
  • No fixed EMIs. Only easy repayments.
  • Unsecured and open-ended credit.
  • Interest will be charged only on the loan amount that is used.

Then, why wait! Grab an opportunity to enhance your credit score with FlexSalary.


1. What affects my credit score?

Common factors such as payment history, amount that you owe, credit history length, credit mix, and new credit can affect your credit score.

2. Do medical bills affect my credit score?

No! Medical bills will not generally factor into credit scores.

3. What is bad credit on a credit report?

A history of late payments or debt is considered a bad credit. With a bad credit, you become ineligible to borrow money at your favourable interest rate.

4. What is a soft inquiry on a credit report?

A soft inquiry is a credit report check that is done to check your credit score, without affecting your credit score.

5. When is a hard inquiry done on a credit report? 

A hard inquiry is done when your lender makes a request to the credit bureaus to review your credit reports, which is as a part of the loan application process.