Factors which will cause trouble to you on your credit report

Creditworthiness is an important aspect of one’s financial life. You will not know how good or bad you appear to your lenders unless your check CIBIL score online. CIBIL score entirely depends on the information that is recorded in the credit report. Here are some factors that might cause trouble to you on your report.

  1. Bankruptcy

Bankruptcy is the biggest indicator of troubles in the credit report. It implies that the person has had serious difficulties to meet his obligations in the past.  It has a long lasting impact on the ability to obtain new credit. When a bankruptcy is discharged it stays on the credit report for up to 10 years. The more recent it is the more problems you will have in qualifying for any loan or credit card.

  1. Delinquency

If you fall behind payment schedules then it will be reported in the credit report in the form of delinquent accounts. Even if you later clear your accounts the entry that you were previously delinquent stays on the report for 7 years from the date of last scheduled payment. If you check your cibil report online and find such entries pay up as soon as you can, starting will most past due accounts first as they cause greater damage than the most recent ones.

  1. Charge-off

If your lender thinks that the debt will no longer be collectable, then rather than showing it in his books as past due debts, he removes it from his books and charges off your account. Mostly the debt is sold to a debt collector who then attempts to collect the debt by filing a case. This information about charged off accounts or accounts sent for collection is shared with the credit bureau. It will appear on your report for 7 years and hurt your score even more than a delinquency.

  1. Foreclosure

Another serious financial event that leaves a bad remark on your credit report and can create troubles in obtaining loan in future is a foreclosure. If you fail to make a payment on the loan and the bank seizes your collateral it will be reported on the credit report. This information will stay for 7 years. Lenders stay away from borrowers who have had a foreclosure in the past. So if you wish to apply for new credit you may have a hard time in getting approved for one.

  1. High credit utilization

If you carry a significant amount of balance on your credit card it could be viewed as a bad sign. Your credit utilization is calculated by dividing the amount of debts you owe by the total available credit limit. If it is more than 30% it will cause a dip in the credit score. But the impact of this mistake stays for a period of 30 days and can easily be corrected by paying off the balances. That’s because your lenders send your balance updates to the credit bureaus once every month. So if your debts are high on one month and show up as a negative sign they will be replaced by the new information the next month if you pay off the balances. Another possible solution is to request for a raise in the credit limit or apply for a new credit card. You can check CIBIL score online to see the effect on the score.

  1. Hard inquiry


When you apply for a new credit and allow the lender to pull out your credit report a hard enquiry will show up on the report. It stays for about two years and may cause a temporary dip in the score for 6 months. A single enquiry is not necessarily a negative sign but if you apply for multiple credits within a short span of time then a series of enquiries will indicate a credit hungry behaviour and increase the damage. However, if you check CIBIL score online it will not hurt your score as it is considered a soft enquiry. Hence you should only apply for credit when it is absolutely necessary. Also narrow down your choices and apply for loans where you think you have a good chance of getting approved. If you are rate shopping for loans file all your applications within a 45 day period so that all similar enquiries are bundled into one.


Apart from the above factors inaccurately reported information may also create troubles for you. Check CIBIL score online and also review your credit report frequently to make sure there are no inaccuracies.

While a negative information haunts you from 7 to 10 years positive information stays on forever. So the best way to avoid any troubles is to work on your financial habits.  if you pay your bills on time it will help bolster your credit report.