evanferrao
TF Buzz
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%)
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%)
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