How Does Missing One Payment Affect Your CIBIL Score_Banner_WC


How Does Missing One Payment Affect Your CIBIL Score_WC

4 min 28 Mar 2023
  • Can One Missed Payment Affect Your CIBIL Score?
  • What is the Effect of a Missed Payment on Your CIBIL Score?
  • What are the Ways in Which One Can Default on Their Payments?
  • How to Improve CIBIL Score?
  • Ways to Avoid Late Payments

The CIBIL score is calculated using information from a person’s credit report, which includes information about their credit accounts, credit inquiries, and payment history. The credit bureau compiles information from various sources, including banks, credit card companies and other lenders to create the CIBIL report. In this article we will see how defaulting on payments and delaying them can potentially affect your CIBIL score. 

Can One Missed Payment Affect Your CIBIL Score?

A single missed payment can have a significant impact on a person’s CIBIL score. When a payment is missed, the lender usually notifies the credit bureau, and the information will appear on the credit report. Now the question is, does paying minimum due affect CIBIL score?  

Well, if you have a habit of paying only the minimum amount due over time, your credit utilisation will consequently increase. When the ratio exceeds 30%, it starts negatively impacting your credit score. 

To quickly summarise, skipping payments, paying late, or making minimum payments can all affect your credit score – albeit in different magnitudes.  

What is the Effect of a Missed Payment on Your CIBIL Score? 

When it comes to maintaining your credit score, a thumb rule is to avoid late payments for CIBIL score constancy. A single late or missed payment has a long-term negative impact on your CIBIL score and may jeopardise your creditworthiness. After the initial due date, a missed payment can stay on a credit record for up to seven years. The silver lining though is that the negative effects start to fade away as soon as the borrower continues to discipline their payments. It is worth noting that the impact on your credit score is more if the payment missed is recent. A low CIBIL score results in loan or credit card application rejection.  

To summarise, it is critical to make timely payments and follow all of the CIBIL score-based best practises in order to avoid the adverse effects of missing payments on the credit report and to maintain a good CIBIL score. A missed payment has such a high impact and severity that a borrower must work hard for months, if not years, to regain a good credit score.  

What are the Ways in Which One Can Default on Their Payments? 

Payment defaults are divided into two categories: minor and major.  

Minor Default: When a borrower misses or delays payment for less than 90 days, this is considered a minor payment default. Banks and lenders consider such defaults to be minor because they believe they will be resolved quickly. However, the CIBIL score is temporarily impacted in this case. 

Major Default: When the borrower pays the credit amount but does so after 90 days, this is considered a major payment default. As a result, the CIBIL score suffers, and the borrower loses the status of a good debtor. Also, major payment default along with low CIBIL score both hinder loan/credit card approval. 

The exact impact however depends on factors such as the length of the delinquency, the amount of the missed payment, and how recently the payment was missed. The frequency, severity and recency of missed payments can affect your credit score in multiple ways. 

Impact of a Missed Payment

Here's how a missed payment can affect you:

Decrease in credit score:

Missed payments can lead to a drop in your credit score. Because payment history accounts for a significant portion of your credit score, a missed payment can have a significant impact on your creditworthiness. 

Late payment fees and interest charges:

If you fail to make a payment on time, you may be charged late payment fees and interest. These fees and charges can add up and make paying off your balance in full more difficult.

Difficulty in obtaining credit:

Missed payments can make future credit applications more difficult. Missed payments may be viewed as a sign of financial insecurity by lenders and financial institutions, which may be less willing to extend credit to you.

Higher Interest Rates:

If you are approved for credit despite having missed payments on your credit report, you may be subject to higher interest rates, making borrowing money more expensive.

Negative impact on credit report:

Missed payments can stay on your credit report for up to 7 years, which can have a negative impact on your creditworthiness during that time. 

How to Improve CIBIL Score?

Maintaining a healthy credit score is essential for accessing credit in the form of loans or credit cards. A low CIBIL score can make it challenging to access credit and may result in higher interest rates and unfavourable loan terms. Improving your CIBIL score requires time and effort, but there are several steps you can take over time to improve your score. Here are some pointers to help you increase your CIBIL score:

Never leave any debts unpaid:

One of the most important factors influencing your CIBIL score is your payment history. Make sure to make all your credit card and loan payments on time to avoid late fees and a negative impact on your credit score.

Maintain a low credit utilisation ratio:

The percentage of your available credit limit that you are currently using is referred to as your credit utilisation ratio. Maintaining a low ratio can help you improve your CIBIL score.Try to keep your credit utilization below 30% of your total available credit limit.

Do not make multiple credit card or hard inquiries:

Every time you apply for credit, it gets recorded in your credit report and may negatively impact your credit score. Avoid applying for multiple credit products within a short period of time as this can make you appear credit-hungry and may hurt your credit score.

Maintain old credit card accounts:

Your credit history has a significant impact on your credit score. Keeping your old credit accounts open can help boost your credit score by demonstrating a long history of creditworthiness.

Check your credit report for errors:

It's critical to review your credit report on a regular basis to ensure that there are no errors or discrepancies that could be harming your credit score. If you discover any errors, file a dispute with the credit bureau to have them corrected.

Maintain a credit mix:

Having a variety of credit products, such as credit cards, personal loans, and Home Loans, can help your credit score. This demonstrates to lenders that you can manage various types of credit. 

Also Read: Credit Mix: Different Types of Credit that Boost Your Credit Score 

As soon as possible, resolve the late payment issues:

If you have missed a payment, it is critical that you resolve the situation as soon as possible.

Maintain credit repayment discipline:

A sound credit score and financial stability depend on maintaining credit repayment discipline.

Improving your CIBIL score takes time, but by following these tips and practicing good credit habits, you can see results over time. Remember to keep an eye on your credit report and score on a regular basis to ensure you're on the right track.

Ways to Avoid Late Payments

Late payments can have a significant negative impact on your CIBIL score. There are many methods for avoiding late payments; however, it is the borrower’s responsibility to adhere to a few guidelines:

Choose the option for automatic debit:

Setting up automatic payments for your bills is one of the simplest ways to avoid late payments. This function takes the predetermined credit amount each month out of the borrower’s bank account. Many banks and financial institutions let you set up automatic payments for recurring bills like credit card payments, loan payments, and utility bills. You can ensure that your bills are paid on time every month by setting up automatic payments, and you won't have to worry about forgetting to make a payment.

Create and stick to a budget:

Another effective way to avoid late payments is to create and stick to a budget. A budget can assist you in keeping track of your expenses and income, as well as ensuring that you have enough money to pay your bills on time. Make a list of your bills and pay the most important ones first.

Set up reminders:

Set up alerts for the payment deadline and credit payment due dates. If you prefer to pay bills by hand, consider setting up reminders to help you remember when they are due. Set reminders for your bills using a calendar or a reminder app so you don't forget to pay them.

Negotiate with your lender:

If you're having trouble making payments, you should contact your lender and try to work out a payment plan or a new due date that works better for you. Many lenders are willing to work with you to find a solution that allows you to avoid late payments and keep your credit score intact.

Convert outstanding payments into EMIs monthly:

One of the best strategies to manage debt and raise your CIBIL score is to turn outstanding payments into Equated Monthly Instalments (EMIs). EMIs offer an organized way to pay off the debt over time, and they also help to raise your credit score. It shows your commitment to repaying the debt and makes managing your finances easier when you turn unpaid balances into EMIs.

Also Read: Impact of Late Payment on CIBIL Score? 

Final Words

In conclusion, keeping a high CIBIL score requires avoiding late payments. You can make sure you pay on time and maintain a decent credit score by setting up automated payments, creating a budget, utilising reminders, negotiating with your lender, and keeping an eye on your credit report. To avoid late payments, keep in mind that having a good credit score can lead to prospects for loans and credit with advantageous terms.

Also Read: 7 Tips to Help You Boost Your CIBIL Score 



One missed payment may be recorded in your credit report but should not drastically affect your credit score.

You can start paying your dues on time and wait patiently until your credit score restores itself back to normal.

A cheque bounce does not directly affect your credit score, nor will it reflect on your credit report as banks and lenders do not report bounced cheques to credit bureaus. However, if a payment is delayed or missed due to a bounced cheque, then it will reflect on your credit report and affect your credit score.

Request your lender. If you have had a good relationship with your lender, you can request for a goodwill adjustment. All you have to do is write a formal letter to the lender explaining to them the reason for late payment.

Avoiding late payments is a conscious decision. As such, if you are frequently missing out on your payments due to reasons such as forgetfulness, there are 2 practices you may follow-

Set the payment to auto debit – Setting your payment on auto debit would automatically deduct the amount from your account without you having to remember every time. The only precaution you need to take here is to have sufficient funds in your account around this period.

Set up calendar reminders– If you do not want the money to be auto deducted from your account for whatever reasons, you can set a recurring calendar event on the specific date of every month and also set a reminder for the event that would go off a day or two in advance to prepare you for the deadline.



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