Sonal R Patel
May 31, 2013 5:33 pm
I have four Credit Cards. I use one for general shopping some times and another for movie tickets. I pay dues with in due dates. But other two I dont use at all. I want to close them. Does it hamper my CIBIL score?
Its great to get help and suggestion from you guys. Thanks all.
And regarding bike loan, I am planning to take it by own money 🙂
I second Ashal’s opinion on Bike loan.
Very costly (minimum about 12.5% fixed for 2-3 year term). Bike is not going to appreciate over time so paying interest on loan taken for bike / car should be avoided as far as possible.
Dear Sonal, card related issue is already discussed. Regarding the bike loan, please do not opt. It’s very costly & ion a sense injurious to your financial health. Use your own money to purchase bike. if you are short on cash, please delay the purchase till the time you can manage the full amount.
Sharing my personal experience on this. I used to have 5 credit cards and managing them was always difficult. Also the credit limit that could have been extended to me on each of the card was not very big. Since it was difficult for me to manage all the cards, therefore I closed 3 cards. Now I have only 2 cards and after closing these unwanted cards, credit limit of 2 cards have been increased by bank.
So, if I look at this way – 5 cards with limit X and now 2 cards with limit X or even more than X I am better off. I never touch the credit limit and life is easier managing 2 cards.
Did closing of credit cards affect your CIBIL score?
Closing of those cards has not affected my credit score adversely, my score is upwards of 800 and have recently got my home loan sanctioned as well. So I have not faced any issues as such, with respect to CIBIL/cerdit score.
You can close the credit cards , thats not an issue, unless you are still not touching your overall limit after closure . Let me give an example
Lets say your overall limit of 4 card combined is 1 lac, but your usage per month is 30-40k . Now if by closing your 2 cards ,the overall limit is close to 30-40k , Then it your usage will be very high percentage of your credit limit (close to 80-100%) . So in that case dont close the cards.
But if by closing your 2 cards, your overall limit is still 70-80k and you use 30-40k out of it . then go ahead and close them . No effect will be there .
I need more suggestion regarding whole issue.
you should keep all the cards. in other words, NEVER EVER close unused lines of credit. higher number of unused cards translate to low credit utilization which in turn cranks your cibil score up.
But, I dont want to keep unused cards with me. I dont want to manage 4-5 cards and just want to keep 2 cards for comfort ability.
One SBI card I have been using since 7 months and other 3 cards just recently got with in last 2 months. I should have thought deeper before applying. I did a mistake and how can I rectify for that now?
I also want to apply for bike loan within 10 days. I can purchase bike without loan if I wait for 1-2 months. The current savings I have and the would be savings in next 7-8 months have to be used for a different purpose for which I do not want to take personal loan. Does my CIBIL score is sufficient for it. What would be the effect of loan on CIBIL score?
My current CIBIL score is 776. In Enquiry Section, its shows 4 credit card. How can I improve upon this?
The Cibil CIR captures details on all the credit facilities that one has availed like home loan, auto loan, credit cards etc. Details of unused credit cards, like the date of opening and credit limit, will also reflect in the “Accounts” section of the CIR and have an impact on the credit score.Credit utilisation and trade attributes such as the age of the credit account, type of credit, mix or balance of credit instruments etc. impact your credit score.
However, unused credit cards will not drastically impact your credit score if you have been regular at payment on all your other credit accounts, along with these credit cards in the past.
In fact, if you have been regularly paying your EMIs on all the credit facilities availed by you and still have unused credit cards showing on your CIR, it will provide a positive indication of your financial security. You must keep in mind some basic facts on credit cards for managing them prudently and using them to your benefit for building a good credit score:
More FAQ in our article FAQ on CIBIL CIR Report and Score
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