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Impact of EMI Default on CIBIL Score

By IIFL Home Loans | Published On Dec 18 2023 7:51 AM 1 min read 175 views 389 Likes

A CIBIL score is a three-digit number ranging from 300 to 900 that tells lenders how good you are at borrowing money and paying it back. Maintaining a good CIBIL score is crucial as it reflects your creditworthiness, directly influencing your ability to secure loans and credit cards. A high CIBIL score can lead to better interest rates and favourable terms, making financial management more efficient and cost-effective. You can consider it as a score for how responsibly you've handled your money in the past. But, just like any score, there are ways to lose points. Missing an EMI, which stands for Equated Monthly Installment, is one of the quickest ways to watch that score drop.

In this article, we will discuss the impact of an EMI default on your CIBIL score and provide insights into a common concern, which is whether checking your CIBIL score can affect it. You will learn how to maintain a good financial reputation and keep your CIBIL score in check.

Minor and Major Defaults

Before we explore how a missed EMI affects your EMI CIBIL score, it's important to understand the types of defaults. Defaults are categorised into two types: minor and major, and both can have different consequences on your EMI default on CIBIL score.

  1. Minor Defaults are when your payments are delayed or missed for a period of less than 90 days. Although it might seem small, even a minor lapse can be a blot on your financial record. Your CIBIL score feels the effect of this slip-up, but thankfully, it's usually a temporary dip. By getting back on track with your payments, you can improve your score.
  2. Conversely, Major Defaults occur when you fail to make payments for more than 90 days. This is when the situation gets more serious. Your account is then classified as a Non-Performing Asset (NPA), and this is a red flag for lenders. With a major default on your record, finding a lender willing to give you a loan could be a daunting task.

Make sure to keep the following pointers in mind to improve your CIBIL score after a default:

  • Ensure all your loan EMIs and credit card bills are paid on time.
  • Aim to use less than 30% of your credit limit. High utilization can indicate dependency on credit and may lower your score.
  • Have a mix of secured (like home loans) and unsecured loans (like credit cards). This shows good management of different credit types.
  • Too many loan inquiries in a short period can reduce your score.
  • Regularly check your credit report for errors or discrepancies and report them immediately to the credit bureau for correction.
  • Keep older credit accounts open as they contribute to a longer credit history, which can positively impact your score.
  • Work towards paying down high outstanding balances on your credit cards or loans.

Learn effective strategies for rebuilding and enhancing your CIBIL score.

Impact of Missed Payments on Your Credit Score

Understanding how missed payments affect your credit score is crucial, especially if you're considering a home loan for CIBIL defaulters or worried about how EMI affects your credit score. It's a significant factor; your repayment history makes up 35% of your CIBIL score.

Tabled below is a simple breakdown of the impact of delayed EMI payments on your CIBIL score:


Impact On Your CIBIL Score

0-30 Days

There is little to no impact, as credit bureaus are likely not updated with minor payment delays.

31-90 Days

A noticeable drop in your score, since credit bureaus are informed of delayed or missed payments within this timeframe.

More than 90 Days

Being marked as a defaulter, your score could decrease rapidly, affecting your creditworthiness.

While a single late payment may not significantly damage your credit score, consistently missing payments, even a few, can temporarily cause a drop in your score. However, if you allow a payment to remain overdue for more than six months, the effect can be much more severe. Such a mark on your credit history may make lenders hesitant to approve your loan application, considering the risk your profile poses.

Does Checking CIBIL Score Affect your CIBIL Score?

Staying informed about your credit score is a responsible financial practice. Regularly checking it is a "soft inquiry," leaving your score unaffected. This knowledge empowers you to track your financial health without impacting your creditworthiness. Being aware of your credit status allows you to catch potential issues early, maintain financial stability, and make informed decisions when applying for credit. It's a proactive step towards financial responsibility and smart money management.

However, it is important to know your credit score as it is one of the responsible financial behaviors.

Responsible borrowing is crucial for protecting your credit score.

Over To You

Maintaining a good EMI CIBIL score is essential for financial health. Whether it's a minor slip or a major stumble, any default on CIBIL score can have lasting effects on your ability to borrow in the future. Being diligent with EMI payments is key to avoiding the pitfalls that can bring down your score. And if you're ever in doubt, remember that checking your score is a harmless step in the right direction—it doesn’t cause any damage.

For more insights and tips on managing your credit score and navigating loans, we encourage you to visit IIFL Home Loans. There, you can find a wealth of articles that can help you keep your financial reputation in good condition.


1.  What is a CIBIL score?

A CIBIL score is a three-digit number that lenders use to evaluate how likely you are to repay loans. It ranges from 300 to 900, with higher scores being better.

2.  Does an EMI default affect my CIBIL score?

Yes, an EMI default does affect your CIBIL score. A single missed payment can lead to a temporary dip in your score, but consistent defaults, especially over 90 days, have a more severe and long-lasting impact. These major defaults can negatively affect your credit score for up to seven years. Hence, it's crucial to manage EMIs effectively to maintain a good credit score.

3.  Are there different types of defaults?

Yes, there are minor defaults (missed payments for less than 90 days) and major defaults (missed payments for more than 90 days), both affecting your score differently.

4.  Can I get a home loan with a poor CIBIL score?

It's difficult, but not impossible. There are specific products like home loans for CIBIL defaulters, but they may come with higher interest rates.

5.  Does checking my CIBIL score lower it?

No, checking your own CIBIL score is a soft inquiry and does not affect your score. Only hard inquiries by lenders can impact your score.


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