Using HDFC bank credit cards reduces ones credit score

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Deal Newbie
evanferrao

HDFC doesn't report credit limit to credit bureaus. They say that according to RBI, it's not mandatory to report credit limit (which may be true). But credit utilization is an important factor in calculation of credit score. Thus, most credit bureaus just use the highest used amount as the credit limit. My card currently has a limit of INR 550000, the highest ever used was 139678, the latter of which is considered to be the credit limit by CIBIL and Experian. 

Say, I spend 125000 next month. According to HDFC, my utilization would be 22.727% which is well under the 30% recommended limit. However, according to CIBIL and Experian, the utilization would be 90%, which is an immediate red flag, and would surely result in a decrease in credit score. Unlike Credit Enquires and number of accounts, which are low impact parameters, credit utilization and payments are high impact parameters. So, the drop in score should be pretty significant.

There seems to be no solution for now.

Images attached below for reference.

Screenshot20230311-094724Brave

Screenshot20230311-095703OneScore

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Screenshot20230311-095732OneScore


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Deal Cadet Deal Cadet
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The only way out I see is to look for the date when it gets reported, which usually before month end or at bill generation and pay up the amount before the utilization gets reported.

Finance Mentor Finance Mentor
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Even if you pay up in a day after transaction, credit usage amount won't be affected, right? So, no benefit in paying up fast...
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Savings Mentor Savings Mentor
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Is HDFC your only credit card or you have several others too? Credit limit utilization % I think is as per combined total limit of all CCs. That being said, I also hate the fact that HDFC doesn't report credit limit to bureaus. They should.

Generous Generous
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Credit utilisation is calculated based on your overall credit exposure. So if you have a 30L exposure among your cards then utilising 3L on hdfc and 0 on other cards then utilisation will be 10% according to credit bureaus. So do not worry about it.

The individual utilisation per card u see on onescore app can be ignored. That's not how bureaus calculate utilisation.

Benevolent Benevolent
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I read this a few times here and there. But in my experience, it works on individual card basis only.

Once I had close to 90% utilisation on Paytm Citi card (as it's limit was too low and my overall utilisation was barely 2-3%) and my cibil dropped by about 40 points. It came back to normal in 3-4 months, once everything was settled and utilisation came back to normal.

Now last month again, i reached 60% utilisation on my Bob card and cibil dropped by 8 points. Overall utilisation was just 1-2%. Next month Bob utilisation was reduced and cibil was back to normal.

Generous Generous
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use hdfc upto max credit limit in a month.. and viola!! there will be no issue later

Deal Subedar Deal Subedar
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ye sb theek h, pehle y btao y ferrao firangi ko hdfc card diya kyu? 😒

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Finance Ninja Finance Ninja
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2-3 point leke kahan jaoge? Itna kyun sochte ho bhai.
Helpful Helpful
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20 30 points ka difference he 
This will stop you from crossing 800 score and people who are in this boat cant even close the cc the best option is get a new card on top and request to show as a upgrade get it on email and also send one copy to cibil. Been there done that.Only get HDFC credit card if you already have a higher limit on other cards or else stay away.
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Deal Cadet Deal Cadet
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Which app is this for checking credit score and is it free?

Finance Mentor Finance Mentor
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I don't think hdfc non reporting limit affects credit score. Cibil dose not count percentage usage for hdfc. 

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