Using HDFC Bank credit cards reduces one's credit score

[evanferrao]

HDFC doesn't report credit limit to credit bureaus. They say that according to RBI, it's not mandatory to report credit limit (which may be true). But credit utilization is an important factor in calculation of credit score. Thus, most credit bureaus just use the highest used amount as the credit limit. My card currently has a limit of INR 550000, the highest ever used was 139678, the latter of which is considered to be the credit limit by CIBIL and Experian.

Say, I spend 125000 next month. According to HDFC, my utilization would be 22.727% which is well under the 30% recommended limit. However, according to CIBIL and Experian, the utilization would be 90%, which is an immediate red flag, and would surely result in a decrease in credit score. Unlike Credit Enquires and number of accounts, which are low impact parameters, credit utilization and payments are high impact parameters. So, the drop in score should be pretty significant.

There seems to be no solution for now. Big Brain (or rather small) move by HDFC Bank. Penalizing you for using their card and keeping utilization under 30%. The only way one can get around is to get the card, spend its max limit, which will update the credit limit in CIBIL and Experian. This too, however, would temporarily decrease the credit score as the card is maxed out. The “workaround” is as dumb as the employee in charge decided it would be funny if HDFC didn't report credit limit to credit bureaus.

TLDR; HDFC doesn't care about your credit score. Limit their card usage only for availing offers on Amazon/Flipkart etc. For other purchases, it's not worth using a card that actively hurts your score for spending cautiously.
TLDR2; Use HDFC cards only if you have other cards, since the limit of the other cards will bring down ones overall utilization ratio.

Images attached below for reference.
(spending even 20k leaves me with a utilization of 15%)

 

[jack333]

billed amount
Nope
Spend maximum in a single billing cycle

As Hdfc reports to cibil at month end, if my bill generation date is 15th, will it report the billed amount at month end or total due at month end?

 

[kshitij_0]

But there is a timeline for that right ?

are you saying to book the item 2 days before statement generation date and once its generated, cancel the order ?

For example, if I by 2L TV 2 days prior to stmt date and it gets generated.... then do I have to pay the stmt amount i.e. 2L even though the amount would be refunded by AZ/FK ?

As, then I would have 2L Credit lying in my card from next month 😵

As Hdfc reports to cibil at month end, if my bill generation date is 15th, it will report to cibil billed amount at month end or the total outstanding amount at month end? In short if i spend more after bill generation before month end without paying the bill, will it help to increase the reported limit in cibil?
@kshitij_0 @vn_1 @Kartik2022

Date of transaction is not important. What's important is the maximum outstanding amount in one billing cycle/month will be reported to Credit Bureaus.
Having said that, it's always better to do the transaction way before the billing date/month end so that it doesn't reflect the outstanding amount at the date of reporting(whatever it is), because it will affect credit utilisation ratio. CUR will be 100% if you wait till billing date/month end. It will be harmful for your score temporarily.

 

[kshitij_0]

As Hdfc reports to cibil at month end, if my bill generation date is 15th, will it report the billed amount at month end or total due at month end?

No one knows this clearly. At least I don't know because I have experienced both things at multiple instances from different banks. So it may be random for random banks and months.

 

[jack333]

Does it report to cibil billed amount or total outstanding at month end? My billing date is 15th. If i dont pay the bill till month end and do some more transactions after billing date, will they report only the billed amount or total outstanding to cibil? I want to increase reported limit shown in cibil by hdfc
@Wealth is my birth right! @Abhishek012

 

[kshitij_0]

Today, I checked my CIBIL score through GPay. In that report, the total limit is not showing for HDFC and for all other banks, it's showing correct. So there is a possibility that something is different with HDFC and they don't show the total limit.

 

[jack333]

They show only the maximum billed amount. I want to know whether its statement billed amount or total outstanding at month end as they report at month end

 

[EINSTEIN]

In my experience they report total billed amount. But ask some more experienced members to confirm as I don’t use hdfc that much.

 

[EINSTEIN]

Today, I checked my CIBIL score through GPay. In that report, the total limit is not showing for HDFC and for all other banks, it's showing correct. So there is a possibility that something is different with HDFC and they don't show the total limit.

This is a well established fact in this community that hdfc does not report limit

 

[Slayer]

In my experience they report total billed amount. But ask some more experienced members to confirm as I don’t use hdfc that much.

Why would you? 😳 😳

 

[EINSTEIN]

Why would you? 😳 😳

Not use hdfc? Because of Magnus

 

[Slayer]

Not use hdfc? Because of Magnus

Why would you (even use HDFC) 😳 😳

 

[EINSTEIN]

Why would you (even use HDFC) 😳 😳

I have Infinia, it’s a good card using it after completing Magnus milestone.

 

[Card_Crafter]

They show only the maximum billed amount. I want to know whether its statement billed amount or total outstanding at month end as they report at month end

It's neither actually. They report total utilised credit at month end which is outstanding+ unbilled+refunds as far as I know.

 

[neogen]

Thanks for this enlightening thread. Eye opener for me.

Here is what my CIBIL HDFC looks like. I guess, time to stop using HDFC 🙄

 

[jack333]

It's neither actually. They report total utilised credit at month end which is outstanding+ unbilled+refunds as far as I know.

So best think is to use hdfc card to maximum possible in the same month of issue

 

[Card_Crafter]

So best think is to use hdfc card to maximum possible in the same month of issue

This is my second month with HDFC and i am doing the same. Planning to utilise 90-100% of credit limit this month just for CIBIL. Then from next month onwards, will utilise less than 30%. My CIBIL will be heavily impacted this month.

 

[Slayer]

This is my second month with HDFC and i am doing the same. Planning to utilise 90-100% of credit limit this month just for CIBIL. Then from next month onwards, will utilise less than 30%. My CIBIL will be heavily impacted this month.

That's why hold multiple cards

 

[Card_Crafter]

That's why hold multiple cards

Fully agree. I have 3 other cards as well including one ICICI secured card. But the problem is ICICI secured cards also don't report the credit limit to the bureaus. So I am kind of f*cked up right now, having two non reporting cards.

 

[jack333]

Has anyone complained it to rbi ombudsman. This practice of hdfc is spoiling credit score

 

[neogen]

Thanks for this enlightening thread. Eye opener for me.

Here is what my CIBIL HDFC looks like. I guess, time to stop using HDFC 🙄


View attachment 11873

So practically, my credit limit is only 3.93 L on HDFC. Am I right in assuming that?