EMI Delay Rules: Missing just one EMI does not immediately damage your CIBIL score. Let’s understand after how much of a delay banks report outstanding dues to credit bureaus and how this impacts your score.
CIBIL Score News: If you have taken a home loan, personal loan, or car loan from a bank or financial institution, repaying your EMI on time is crucial. However, sometimes an EMI might not get deducted on the scheduled date due to technical issues, insufficient funds in the bank account, or other reasons. In such cases, many people wonder: does the CIBIL score drop immediately after missing a single EMI?
The good news is that a delay of a day or two usually does not have an immediate impact on your CIBIL score. However, if the outstanding amount remains unpaid for a prolonged period, the bank may report this to credit bureaus, which could lead to a drop in your credit score.
When does a late EMI impact your score?
Delay of 1 to 7 days: If the EMI is paid after a delay of a few days, it generally does not have a direct impact on your CIBIL score. However, the bank may charge you late fees, EMI bounce charges, and other penalties.
Delay of 30 days: If your EMI remains outstanding for 30 days or more, the bank may report it to credit bureaus. This can cause your CIBIL score to drop by 50 to 100 points, potentially making it difficult for you to secure loans or credit cards in the future.
What happens with a delay of 60 to 89 days?
If you consistently delay payments, your credit profile weakens further. During this period, banks and recovery agencies may start contacting you regarding the outstanding payment.
How do banks report this?
Banks transmit customers' payment details to credit bureaus every month according to a fixed reporting cycle. In many cases, a drop in the CIBIL score can be avoided if the outstanding amount is paid before the 30-day cycle concludes.
How can you improve a poor CIBIL score?
Pay all EMIs and credit card bills on time.
Clear outstanding dues as soon as possible.
Avoid missing EMIs by setting up auto-debit or reminders.
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