Impact of Late Payment on CIBIL Score_WC


Impact of Late Payment on CIBIL Score_WC

6 min 02 Mar 2023
  • What is a Late Payment?
  • Does Late Payment Affect CIBIL Score?
  • What is “Day Past Due” (DPD)?
  • Tips to Maintain a Good Credit History

In the modern day, consumers utilize loans and credit cards to help them reach their desires and financial objectives. One of the crucial criteria and measurements for obtaining this critical credit access is the CIBIL Score.

The credit score of a consumer is known as a CIBIL Score. This is a three-digit numerical summary of a consumer's credit history and a portrayal of the individual's credit profile. Banks and financial companies look for a good credit score before processing a loan application, particularly an advance loan. The CIBIL Score is based on previous credit behaviour, such as borrowing and repayment patterns disclosed on a regular basis by banks and lenders with CIBIL.

What is a Late Payment?

A payment that isn't made by the due date specified by the borrower and the lender, is considered late. Late payments can lower a borrower's credit score and make it more challenging for them to get loans in the future. To avoid damaging your credit score, it's crucial to check your CIBIL score and complete all your transactions on time.

Does Late Payment Affect CIBIL Score?

Yes, but before getting into what affects a CIBIL score, let us discuss what a CIBIL score is. A one-line answer would be that a CIBIL score is a three-digit numerical summary of your credit history, rating, and report that varies from 300 to 900.

Late payments can have several detrimental effects on a borrower's credit score and future ability to get credit. Following are some of the possible effects of late payments:

  • Negative effects on credit scores: Late payments are a common element that lenders consider when analysing a credit application and can significantly lower a borrower's credit score. 
  • Difficulty getting credit: Having a history of late payments can make it harder for a borrower to qualify for a loan or credit card, and if the borrower is granted a loan or a credit card, it could lead to increased interest rates or fees. 
  • Enhanced default risk: Late payments are generally a sign of economic instability and may represent a greater default risk to lenders. A borrower may find it much more challenging to get credit in the future as a result of this.
  • Negative effect on credit report: Late payments are reported to credit bureaus and will show up on the credit report of the borrower. This may affect the borrower's capacity to get credits as well as the interest rates and fees that are charged.
  • Difficulty to recover a low CIBIL score: It is challenging to raise a low CIBIL score because defaults are assumed to be the "status quo" until the financial institutions and banks notify CIBIL otherwise. To see an improvement in their CIBIL score, people must make consistent, on-time repayments over a prolonged period of time. 
  • Affects your status: Here, status implies your reputation with the lending institution and the CIBIL.  

What is “Day Past Due” (DPD)?

Day Past Due (DPD) indicates the number of days that have gone without making an EMI or credit card payment. If you have previously made on-time payments, your DPD will be listed as '0'. If you are 30 days late with your payment, your report will reflect "30" against the preceding month. 

There may be instances in the Day Past Due section when "XXX" is stated. It signifies that the lender has not submitted the bank with payment history information. If you notice it on your credit report, you should not be concerned because it has no bad credit rating score and it does not affect your future possibilities of getting credit or credit card approval.

Tips to Maintain a Good Credit History

You can take several actions to prevent late payments and keep a good credit history. You can assist and ensure that you make all of your payments on time and protect your credit score by following these instructions: 

  1. Set up automatic payments: A lot of lenders give you the option to do so, which can help you make sure that your payments are made on time. Essentially, this means that you leave standing instructions to your bank that the bills are to be cleared on a certain day of the calendar month.   
  2. Use a datebook or reminder system: To help you remember when payments are due, mark the dates for all your bills on a calendar and/or set up a phone or email reminders. 
  3. Sustain a budget: Check that you have enough money in your account to pay all of your expenses and adjust your spending as necessary to prevent going overboard and forgetting to make payments. 
  4. Talk to your creditors: In case you are having trouble paying a bill, get in touch with your lenders as soon as you can to let them know and to discuss alternative solutions. Many lenders are prepared to cooperate with borrowers to come up with a decision that benefits both sides. 


You may be a good bet for the lender and be able to acquire credit if you have an excellent credit history. This implies maintaining a good CIBIL score. Having a great credit history can increase your chances of getting approved for loans such as a housing loan, business loan, or loan against property. To make sure you are credit-conscious and prepared for loans when you need them most, keep an eye on your credit report frequently. It is suggested that all financially independent adults at least check their CIBIL scores twice a year. Any mistakes must be brought to the knowledge of the CIBIL and corrected at the earliest.   

Also Read: Importance of CIBIL Score and Tips to Improve it 


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