CIBIL score dropped after raising disputes

[myfinquest]

My CIBIL score was 810 in March. Today, I was surprised to see it at 760. There were no new accounts , but two disputes I raised

1. Mark Barclay's credit card as closed. (Barclays closed down in India in 2012). This was not my oldest card
2. Mark HDFC car loan (paid up in Aug 2023) as closed.

Will the above causes a drop of 50 ? I don't think so. I had to raise multiple disputes to get the Barclays cc to be marked as closed and I gave multiple bad ratings to their surveys as well.

I have a new HDFC car loan , but it is yet to be reflected in CIBIL report. The only significant thing happened recently was in early Feb when I got an unsolicited loan enquiry from EArly Salary. Though I disputed this with CIBIL , complained with RBI, nothing happened. Early Salary says they got an enquiry through WeCredit and WeCredit says they got it from one of their partners which they are not divulging. But, this caused a drop of only 5 points from Feb to March.

Anyone seeing such massive changes to CIIBL scores ? Wondering if there is any change in the score calculation rules from new financial year.

Thanks.

 

[myfinquest]

Disclaimer: This may not be accurate, but based on information obtained, and after personally experienced.. again not an accurate because maybe only those who designed that CIBIL algo can explain exact reason, so some inputs that I got..

(this is for your 'why' part, similar question I got and found some of the below info)

- You know usual conditions like CUR, pay on time, etc. along with that

factors that may affect our CIBIL score..

View attachment 50011
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I said several times in this forum for the same but some of them not impacted (or based on their monthly checkups no issues) or some of them comparing to others who had multiple two digit cards in short time (and no impact in their CIBIL). So, take it that in consideration..

based on info shared by you..

a sudden increase of 22% (on rolling method CIBIL observed .. consider CIBIL is AI and suddenly you changed the prompt which it didn't observe all these years. So, got confused and took the worst part.

along with that you need to find, (current balance of these 3 cards) / (total current balance available in CIBIL report -> CIBIL summary)

Ex: 1.5Y card last month has outstanding reported to CIBIL as 40k
2Y reported 20k
2.5Y card reported 20k

-- remaining old cards contributed 30k then total utilization of those 3 cards 72% (this changes month on month).

Try to understand above two screenshots (both are from CIBIL), let me know if any changes.. this is what I understand but as I said I maybe wrong. If you found some reason, let me know.

Alternatively, if you have last month CIBIL report (810 one), share both to CIBIL support and ask them exact reason for score change in those two reports, they can give you extra inputs.

Thank you for taking efforts to decode the issue and for the great analysis. I am still trying to process, but here is my take.

Since I was picking up a few cards (2 in 2021, 2 in 2022 and 1 in 2023 ) in recent years, the rolling ratio of new credit to total credit would have been high already. And, this was not a sudden increase of credit hunger, rather spread over 2-3 years. If CIBIL was calculating scores monthly, then I should have seen consistent drop or atleast from Nov 2023. The payments has been consistent not just for CCs, but for home and car loans as well. So, will the new unsecured credit addition can cause a drop of 50 in one month ?

I have to admit that 90% of my spends are in the newer cards - Axis from Jan 2022, New from 2022 Nov and Swiggy from Sep 2023. But is this really a factor than the total credit utilization which is shown as 5% this month with more than regular spends.

Also, 4 cards in 3 years can cause a drop of 50 for a credit age of 17.5 years ?

I will ask the CIBIL customer care, but from my recent experience, they are not that customer friendly and could be giving me just a canned response.

I am just thinking if closure of my car loan account was a trigger and could it have increased the ratio of unsecured to secured credit ? I had my car loan closed in Aug 2023, but it was updated only this month after I raised a dispute.

 

[myfinquest]

For the benefit of everyone - @SSV suggested that I pay off my Axis card before 30th thought the bill due is on 5th. Ace card has a limit of 1.43 only, but in one month, I made a large payment (2% cashback) and Axis reported 90k as the balance to Cibil since they do it on month end and I make payment only in the month beginning. This high utilization could cause a drop. Will pay the bills before 30th and report after a couple of months

Thank you @SSV @helloworld and everyone else who chipped in.

 

[helloworld]

For the benefit of everyone - @SSV suggested that I pay off my Axis card before 30th thought the bill due is on 5th. Ace card has a limit of 1.43 only, but in one month, I made a large payment (2% cashback) and Axis reported 90k as the balance to Cibil since they do it on month end and I make payment only in the month beginning. This high utilization could cause a drop. Will pay the bills before 30th and report after a couple of months

Thank you @SSV @helloworld and everyone else who chipped in.

let us know if you're score back to normal. one month high utilization do not think that much impact. anyway, do not know internal formula to calculate score, so, let us update in coming months.. if possible.

 

[myfinquest]

Update : On April 30, score dwindled further to 756 with the only changes from last month's report is reduced balance in multiple cards 🙁 . Just to remind, my total cc usage as per report is 4% against 6% last time.
@SSV

 

[SSV]

Update : On April 30, score dwindled further to 756 with the only changes from last month's report is reduced balance in multiple cards 🙁 . Just to remind, my total cc usage as per report is 4% against 6% last time.
@SSV

There is no significant difference between 4 and 6 %…
The reduction in score was because of something else…

If you make it 0 on each and every account you will see the difference

 

[TiVoGlObE]

okay let me check.. please remind me in a day or two, if not responded ..

Out of curiosity, were you able to establish anything valuable out of this? I mean we all have suffered decrease hits this past month so anything substantial here?

 

[myfinquest]

Out of curiosity, were you able to establish anything valuable out of this? I mean we all have suffered decrease hits this past month so anything substantial here?

Just checked today and it crawled back from 756 last month to 770. I am sure it is not the enquiries or new accounts. My new 25l car loan caused a drop of just 4. One conscious thing I did in last 3 months were to make sure that my Axis card usage is kept to 10% of limit. If I have to go over, then I will make the payment before end of month so that Axis won't report billed+unbilled to CIBIL. Switched my usage to card with 8-9 lacs limit so that utilization ratio is <5%

Still, I believe it was some change in CIBIL algorithm that caused the drop of 50+ points. The next revision seems to be after 3 months, hence I am seeing the change now. Do note, I kept on checking score (I have subscription) to find a pattern.

 

[myfinquest]

Just checked today and it crawled back from 756 last month to 770. I am sure it is not the enquiries or new accounts. My new 25l car loan caused a drop of just 4. One conscious thing I did in last 3 months were to make sure that my Axis card usage is kept to 10% of limit. If I have to go over, then I will make the payment before end of month so that Axis won't report billed+unbilled to CIBIL. Switched my usage to card with 8-9 lacs limit so that utilization ratio is <5%

Still, I believe it was some change in CIBIL algorithm that caused the drop of 50+ points. The next revision seems to be after 3 months, hence I am seeing the change now. Do note, I kept on checking score (I have subscription) to find a pattern.

Keep in mind , ratio of secured to unsecured loans may also be a factor. I am planning to reduce CL of multiple CCs to below 5L

 

[myfinquest]

My score again jumped 10 points to 780 in Aug. I now strongly believe that CIBIL would have done an year end assessment with some new criteria and dropped the score in Mar 2024 . The only bad pattern I could see in my report is the ratio of secure to unsecured since I had closed my car loan (updated CIBIL only in March 2024) and had a few CL increase in credit cards. Now that I have a new car loan , things should get better.