Your credit score is a reflection of your financial discipline. While regular EMI payments strengthen your score, missing even a single payment can lead to a significant drop. But by how much exactly? Here’s a detailed calculation.
1. Why Timely EMI Payments Are Crucial
Banks and financial institutions rely on your credit score (commonly ranging from 300 to 900) to judge whether you are a reliable borrower.
- High score (750+) – Easy access to loans & lower interest rates.
- Low score (below 650) – Limited loan options & higher interest rates.
Missing an EMI not only leads to penalties but also lowers your creditworthiness.
2. Short Delays (1 to 7 Days) – Minimal Impact
- If you delay an EMI by just a few days, the impact on your score is often negligible.
- Most lenders allow a grace period before reporting delays to credit bureaus like CIBIL, Equifax, or Experian.
3. 30-Day Delay – Score Drops by 50 to 100 Points
- Missing an EMI for up to one month can cause your credit score to drop by 50 to 100 points.
- This is significant enough to impact future loan approvals and credit card limits.
4. 60–90 Days Delay – Serious Damage
- If the delay extends to two to three months, the impact becomes severe.
- Your score may fall by 150 to 200 points, and your loan account may be flagged as default.
- Future lenders may treat you as a high-risk borrower.
5. Over 90 Days – Major Hit to Creditworthiness
- A delay of more than 90 days is considered a serious default.
- Credit score may plunge drastically, pushing you towards the low 500s or below.
- Recovery takes longer, and securing new loans becomes extremely difficult.
6. How to Recover from a Drop
- Clear overdue EMIs immediately to stop further score damage.
- Avoid future delays by setting auto-debit or reminders.
- Maintain a low credit utilization ratio and pay all bills on time.
- Check your credit report regularly and dispute any errors.
Final Takeaway
Even a 30-day delay can cost you up to 100 points on your credit score. The longer the delay, the harder it becomes to recover. Staying disciplined with EMI payments is not just good financial practice—it’s the foundation of a strong credit profile.
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