You repaid your loan. You expected fireworks, a pat on the back, maybe even a 50-point boost on your credit score.
Instead, you saw your CIBIL score drop like a hot potato. WHAT. JUST. HAPPENED?
Don’t worry, you’re not alone — and you’re not being punished for doing the right thing. But the CIBIL algorithm has its own “trust issues,” and sometimes, even repayment isn’t enough.
Let’s decode this credit confusion (and yes, we’ve got some funny and painful real-life stories too!).
😰 Real-Life Shocker #1: “They Said It’s Okay to Pay Late… But My Score Sank!”
“I had a home loan from a private bank. My EMI due date was the 9th of every month. Sometimes, I paid on the 10th or 11th — the bank said it’s okay. I thought they were just being chill. Turns out, even one day late gets marked as a delayed payment on CIBIL!”
Lesson:
Banks being “okay” with late payments doesn’t mean CIBIL is.
Your lender might waive off late charges, but CIBIL still notes the delay. That can dent your score — even if you eventually pay in full.
😬 Real-Life Shocker #2: The LazyPay-OlaMoney-Simpl “Chalta Hai” Trap
“Apps like LazyPay, Simpl, and OlaMoney made it easy to ‘buy now, pay later.’ I delayed payments all the time, because their support would often waive late fees. It became a habit… until I realized my CIBIL score had taken a nosedive.”
What happened here?
You weren’t defaulting, just delaying a bit. But even 1 day late on BNPL (Buy Now, Pay Later) services gets reported to bureaus. Repeated delays = “high-risk borrower” tag.
And guess what?
These apps auto-report to credit bureaus now, just like banks.
💸 Real-Life Shocker #3: “Pre-Approved Loan” Click = Surprise CIBIL Inquiry
“I already had 3 loans. A few apps told me I was ‘pre-approved’ for a ₹4 lakh loan for being a loyal customer. Out of curiosity, I clicked… and BAM — I got a hard CIBIL inquiry. Didn’t even take the loan, but my score still dropped.”
Important:
Even clicking “Check Eligibility” on loan apps can trigger a hard inquiry. Multiple inquiries in a short time = red flag to lenders.
😓 Other Silent Reasons Why Your Score May Drop (Even After Paying Off a Loan)
| Reason | Why It Affects CIBIL |
|---|---|
| 🕒 Delayed reporting by lenders | Even after you repay, the lender might take 30-45 days to update CIBIL. |
| 💳 Closed a long-standing credit card or loan | CIBIL sees this as reduced credit history = lower trust. |
| 📈 High credit utilization | If you’re using over 30-40% of your credit card limit, your score takes a hit. |
| 🕵️♀️ Too many loan applications | Multiple hard inquiries in a short period signal desperation to lenders. |
| ❌ Loan marked as “settled” not “closed” | “Settled” = you paid partially or negotiated — bad news for your score. |
🔧 What You Can Do Instead
✔️ Always pay before due date (not on due date)
✔️ Don’t apply for too many loans — space them out
✔️ Never click “Check Eligibility” unless you’re sure
✔️ Don’t close old credit cards unless there’s a big reason
✔️ Monitor your CIBIL regularly via CIBIL or OneScore app
✔️ Raise a dispute if your lender hasn’t updated a cleared loan
🚨 When Should You Panic?
- If your score drops by >75 points in one month
- If a closed loan is marked as “settled” or “written-off”
- If you see loans or credit cards listed you never applied for (possible fraud!)
✋ Credit Scores Are Like Diets…
They don’t improve overnight. One salad doesn’t make you healthy. One EMI doesn’t fix your CIBIL.
But with consistency, healthy habits, and fewer “junk clicks” on sketchy pre-approvals — you’ll see results.
🧠 Bonus Reads for You:
👉 How to Build Your CIBIL Score With Small Loans – 2025 Guide
👉 It Was Just One Missed EMI – What Could Go Wrong?
👉 What Happens If You Can’t Repay a Loan App in India – 2025 Guide