Why your CIBIL score is even more vital after losing a job Job loss can disrupt your income stream, and servicing loan EMIs and card payments becomes tougher. Your CIBIL score reflects your creditworthiness - the slightest default or delay will see a huge drop, reflecting on your ability to get loans or credit cards in the future. Protecting this score during job loss will help avoid piling up financial stress. Indian lenders keep an eagle eye on repayment history, so self-discipline even in the absence of salary matters.
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Prioritizing payments on debt to avoid defaults When income stops, you must first examine your debt liabilities and prioritize payments that will have the maximum impact on your CIBIL score—like home loans, personal loans, and credit card payment. Skipping them can lead to defaults being reported to credit bureaus. Pay the minimum on credit cards to avoid penalties and reporting of late payments. If you have little savings, put them in the highest-interest obligations to control debt increase.
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Negotiating with the lenders for short-term relief Indian banks and NBFCs will typically have a restructuring plan, moratorium, or reduced EMI scheme for borrowers who actually face financial hardship. Inform your lender in advance of your job loss and request a restructured repayment schedule suitable for your current situation. Such negotiated changes—if entered into in a formal manner—will affect your CIBIL score less than simple skipped payments. The secret is to have the lender report the credit bureau in the correct manner, meaning that your account is "restructured" rather than "defaulted."
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Cutting down unnecessary credit use During times that you’re unemployed or in between jobs, it is best not to rely on personal loans and use credit cards for day-to-day spending, as this increases your credit utilisation ratio—which in turn affects your CIBIL score. Using anything more than 30% of your credit limit can signal money stress to lenders. Only spend on essentials, use any existing savings, and avoid taking a new credit at this time. Remember, that every time you apply for a new credit card, it creates a hard inquiry on your finances which further erodes your score.
Building a recovery plan for credit health Job loss is short-term, but damage to your CIBIL score could last for years unless managed carefully. As soon as you get a job, pay off any outstanding dues and bring back accounts to regular status. Continue monitoring your CIBIL score from time to time so that it accurately reflects your repayment actions. Taking disciplined steps now will make loan taking easier at low interest rates once your financial status firms up.
