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TransUnion CIBIL™ was established in the year 2000 and stands for Credit Information Bureau of India Limited (CIBIL™). It is known as one of the top credit reporting agencies in India which are responsible for maintaining individual credit records.

A CIBIL™ score is a three-digit number that indicates an individual’s creditworthiness. It is used as an evaluation factor by banks and other lending institutions while assessing an applicant’s loan application. CIBIL™ score helps banks and NBFCs (Non-banking Financial Companies) gauge an applicant’s loan repayment capability.

What is the meaning of late payment?

Banks and financial institutions establish a due date by which loan repayments and credit card bill payments have to be made by customers. Non-payment or delayed payment of loans and credit card bills as per the due date are recorded in the CIBIL™ and tagged as late payments. The credit score immediately falls due to late payment, but it may take considerably longer to get it back to an acceptable level even after maintain a consistent record of repayments.

Late payments are considered a negative sign when it comes to the creditworthiness of individuals and businesses. These can become an impediment while seeking loan approvals in the future. Individuals with a low CIBIL™ score can find it difficult to get a loan approval as lenders consider such candidates to be risky. Similarly, timely repayments assure lenders of the borrower’s capability to repay the money borrowed.

Additional Reading: What Happens When I Miss Or Delay My Credit Card Payments

How do financial emergencies impact repayment?

Financial emergencies do happen and result in major turmoil in an individual’s life. If you happen to miss a payment due to a financial emergency, it can be visible on your credit score. In such situations, the person’s defaults are considered by the credit bureaus and stored in their database. If you have failed to make payment in a single month and can catch up with the payments from subsequent months; the data immediately gets forwarded to the credit bureaus by the lending institution.

Do missed payments impact your credit score?

Several factors affect the CIBIL™ score of an individual and one of the major factors is missing a loan repayment or a credit card bill payment. What is the possible effect of missing a payment? Does it impact your credit score? If you miss out on a single loan instalment or credit card bill payment, your CIBIL™ score will dip immediately. Here are some of the consequences of the same:

  • Your CIBIL™ score gets negatively impacted if you miss a single payment for any loan or a credit card.
  • Missed or late payments also get reflected in an individual’s credit report. This can hamper the chances of easily getting a new loan or a credit card in the future.
  • Missing payments on outstanding loan instalments or credit card bills payments can limit your chances of getting a new credit card or loan application approved.

Additional Reading: How Much Does Missing A Credit Card Payment Affect Credit Score

What are minor and major defaults?

For credit users, it is important to know the difference between minor and major defaults. This helps to get a better understanding of missed payments and their impact on an individual’s credit score.

Minor Defaults: If payments are missed or delayed for a period that is less than 90 days, these are regarded as minor defaults. Minor defaults may impact CIBIL™ score in the short run.

Major Defaults: Major defaults occur when a person fails to make his/her payments beyond a time frame of 90 days. In such situations, the individual’s account is categorised under the NPA (non-performing assets) bucket. A major default can keep the lenders away since the assumption is that the individual has poor financial or credit repayment history.

It is easy to infer that in both cases the creditworthiness of a customer is impacted. However, after a minor default, one can ensure that upcoming payments are done as per the stated time slot and thereby, recover the CIBIL™ score gradually.

How to improve CIBIL™ score?

Here are a few tips or ways which can help you to improve your CIBIL™ score:

  • Make credit card bill payments on time.
  • Make your loan instalment payments in full and on time.
  • Ensure to keep your credit card utilization ratio under 40%.
  • Restrict your credit card applications.
  • Avoid multiple loan applications within a short duration.
  • Don’t close your old credit accounts.
  • Make sure to check your credit report periodically and highlight any errors.
  • Focus on building a strong credit age.


It normally takes years to build a good credit record and it only takes a few payment delays to damage your credit history. As credit checks continue to gain greater importance in the Indian credit system, financial discipline is taking centre stage and is the key to maintaining a good CIBIL™ score.

Missing A Payment Affect The CIBIL™ Score FAQs

1. How much does a single missed payment affect credit score?

Even a single missed payment can result in a dip in the credit score. This is why it is important to maintain a steady repayment track record at all times.

2. Does missing a payment affect credit score?

Yes. Missing a payment on credit card bills or loan repayments can severely affect credit score. Lending institutions consider this as a negative sign and immediately intimate credit bureaus about poor credit behaviour.

3. How can I remove a late payment from CIBIL™?

You have to continue making timely repayments in case you have missed a late payment. Such timely repayments are considered by lending institutions and once credit agencies are informed about your positive repayment track record; they may remove late payment history from the CIBIL™ report.

4. Does credit card late payment affect CIBIL™ score?

Yes. A single late payment on credit card bills can negatively affect the CIBIL™ score. It may also take a long time to recover the score and bring it to an acceptable level.

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