Can one reduce hit on Cibil if credit utilisation ratio is consistently more than 30% in a month?
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Can one reduce hit on Cibil if credit utilisation ratio is more than typical recommendation in a month?
Given typical recommendations, using credit card limit up to 10-20% is good for cibil health. But anything more than that impacts it.
Let's say the credit card limit is 1L & bill date is 1st of every month. Due date could be 15-20 days afterwards.
What if one consistently uses more than 50% of credit every month (say 50K, 60K, 70K etc) and repay the full amount without any defaults within usual timeperiod.
1. Will it still impact cibil & thrash it black and blue? (in my opinion, it will but any other thoughts?)
2. Is there a way to offset this impact or avoid it altogether? (e.g. One spends 70K out of 1L in mid of a month and very next day deposits 65K as a payment. This will bring down effective outstanding to 5K even before the bill is generated on 1st of next month). Will this work & avoid the cibil hit?
3. Given the calculation in Q2, will the appropriate rewards be given on 70K or the effective 5K only (which is seen as effective bill on 1st of the next month)?
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2. How were you able to avoid more than 10% util besides consumes a lot more? Were you "pre-paying" the bill before the bill date to "artificially reduce" the effective outstanding?
My utilization has been consistently around 50-60% it drop my cibil by 7pts and it ranges now 5pts up/down. No significant impact
Check your cibil report. It depends on when the card companies report your dues. I have never seen my credit utilisation more than 10% in any of the credit reports (CIBIL, Equifax, CRIF, Experian) although I have utilised more on numerous occasions. I’m not an expert on this it’s just an observation.