If you are planning to avail of a housing loan, it is essential to meet the eligibility criteria determined by your lender. While the actual criteria may vary, some of the common factors include your credit score, income, age, and employment type.
The credit score is one of the key factors that affect one’s chances of getting approved for a loan. It is a three-digit number ranging from 300 to 900 that reflects your creditworthiness and repayment capacity. An excellent credit score (between 750 and 900) indicates high creditworthiness and can increase your chances of availing of a loan at competitive terms and conditions. A low credit score, on the other hand, makes it difficult for borrowers to avail of a loan.
Several different factors affect an individual’s credit score. In this article, we discuss whether an individual’s savings account balance affects their CIBIL score.
Understanding the Savings Account and CIBIL Score Relationship
A savings account helps to shape your financial discipline and repayment capacity, even though it has no direct effect on your credit score. The direct vs. indirect impact is clearly explained in the table below:
| Aspect | Direct Impact on CIBIL Score | Indirect Impact on CIBIL Score |
|---|---|---|
| Reporting to Credit Bureaus | Savings account details (balance, deposits, withdrawals) are not reported to CIBIL. Hence, there is no direct effect. | No indirect impact since only credit accounts (loans, credit cards) are reported. |
| Account Balance | A high or low savings account balance does not change your CIBIL score. | A healthy balance helps you pay EMIs/bills on time, preventing missed payments that can hurt your score. |
| Number of Savings Accounts | Having multiple or dormant savings accounts does not reduce your score. | Managing too many accounts without proper planning could create cash-flow gaps, indirectly risking late payments. |
| Payment History | Not tracked through a savings account. | Using auto-debit from savings ensures timely EMI/credit card bill payments, which strengthens your credit history. |
| Emergency Fund | No direct role in credit score calculation. | A savings buffer helps you avoid defaults during financial stress, keeping your score intact. |
| Lender’s Evaluation | CIBIL does not consider savings activity. | Lenders may review your bank statements. Consistent savings show stability and can improve chances of loan approval (though not via score directly). |
Why a Savings Account Does Not Directly Affect Credit Score?
Savings are not a credit product and therefore, do not have a direct impact on your CIBIL score. Everything that affects your CIBIL score makes its way into your CIBIL report. However, your savings balance account may affect your repayment capacity and therefore, your CIBIL score indirectly.
How Can Your Savings Account Indirectly Affect Your CIBIL Score?
A common question that loan applicants ask is whether an individual’s savings account balance has no direct impact on their CIBIL score. But how does one’s savings account affect their CIBIL Score indirectly?
The balance you have in your savings account affects your repayment capacity. If you have a decent amount of savings, you may be able to honour your EMI commitment, even in the case of adversity. Thus, borrowers who have a good savings account balance rarely default on loan repayment and therefore have a good CIBIL score. On the other hand, borrowers who do not have savings may find themselves missing EMI due dates and incurring late penalties, especially when faced with a financial emergency.
What are the Factors that Affect Your CIBIL Score?
The following factors affect your CIBIL score:
1. Repayment History:
An individual’s repayment history makes up almost 35% of their CIBIL score. If you want to build a strong credit score, you should have a good repayment history. In other words, pay all your loan EMIs and credit card bills on time. Never miss a due date. If you do miss one, clear the missed payment as soon as you can.
2. Credit Utilisation Ratio:
The credit utilisation ratio is the percentage of the credit used from the total limit available. A high credit utilisation ratio indicates a high dependency on credit, which is seen negatively. Thus, borrowers with a high credit utilisation ratio have a low credit score. Borrowers trying to improve CIBIL scores should keep their credit utilisation ratio under 30%.
3. Age of Your Credit History:
The age of your credit history also affects your credit score. The longer your credit history, the better your credit score. Maintain old loan accounts and credit cards, even the ones that you have paid off or are no longer using.
4. Credit Mix:
The credit mix you have will also affect your credit score. Borrowers who have both secured and unsecured loans and manage them responsibly demonstrate financial stability, which can positively impact their credit score.
5. Hard Enquiries:
Lenders approach credit information bureaus when a borrower makes a loan application to enquire about the borrower and their repayment capacity. This enquiry gets registered as a hard enquiry. Too many hard enquiries affect a person’s credit score negatively. Borrowers working on improving CIBIL scores should refrain from making multiple loan applications simultaneously.
Does a Large Savings Account Balance Have Any Impact on Your Cibil Score?
No, your savings account balance has no direct impact on your CIBIL score. Credit bureaus like CIBIL evaluate only your credit behaviour—how you manage loans, EMIs, and credit card payments—not how much funds you have in your bank account.
However, maintaining a healthy savings balance can indirectly support a good credit score by helping you make timely payments, avoid defaults, and show financial stability to lenders. In essence, your balance doesn’t boost your score—but the discipline behind it certainly can.
How a Healthy Savings Account Supports Your Loan Application?
Lenders consider more than just your credit score when you apply for a loan. They value disciplined credit management and repayment. Here's where your savings account practices can have a subtle impact.
Although a savings account has no direct effect on your CIBIL score, lenders may ask for your bank statements to determine how well you handle funds. A consistent flow of income or salary, consistent savings, and a manageable balance can increase the likelihood of loan approval. However, even if your credit score appears to be in the clear, it may raise concerns about your financial stability if your account exhibits irregular cash flow or frequent shortfalls.
Consider it this way: your savings account shows how you manage your finances, while your CIBIL score informs lenders about your credit history. Positive alignment of both enhances your overall profile and may increase your chances of obtaining a loan on favourable terms.
Frequently Asked Questions
Your savings account balance has no direct impact on your CIBIL score. However, your savings account balance can affect your credit score indirectly.
No, as stated previously, savings is not a credit product and therefore, does not impact a person’s credit score. A person’s savings account balance does not even appear in their credit report.
No, you can have as many savings accounts as you want and can easily handle. Your savings is not one of the factors that affect your CIBIL score and therefore, the number of savings accounts you have will not affect your credit rating.
