A bank customer’s repayment history determines their CIBIL score. The CIBIL score is generated without taking into account any other parameters. Coming back to your query, does fixed deposit increase CIBIL score? As I mentioned earlier, an FD itself does not directly increase your CIBIL score in India. Let me share a few more points that I missed last time.
Does FD Increase CIBIL Score?
CIBIL or Credit Information Bureau India Limited scores you know are calculated based on your credit behavior, such as how responsibly you repay loans or credit card dues. Since FDs don’t involve borrowing money, opening an FD won’t affect your score. However, an FD can indirectly help improve your CIBIL score if used strategically.
By using a secured credit card wisely, like making timely payments and keeping your credit utilisation low, you can build a positive credit history. It improves your CIBIL score.
Having a fixed deposit shows financial discipline and stability, which may strengthen your profile during loan evaluations, even though it doesn’t factor into the CIBIL score formula.
To know more details, you can read my previous answer.
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Can A Fixed Deposit Improve CIBIL Score?
Yes, but not directly. When you open an FD, some banks offer secured credit cards or loans against the deposit. These secured financial products help build or enhance your credit history.- For instance, timely repayment of a loan against FD or proper usage of a secured credit card can demonstrate responsible credit behaviour, positively affecting your CIBIL score.
- However, an FD alone, without being tied to credit activity, does not affect your score. CIBIL considers credit usage, repayment history, credit mix, and duration, none of which are affected solely by holding an FD.
- An FD can help maintain financial discipline by acting as an emergency fund. This reduces the likelihood of defaulting on existing loans or credit card payments, indirectly supporting a healthy credit score.
Does Fixed Deposit Increase CIBIL Score?
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2024-12-26T19:25:19+00:00 2024-12-27T10:58:45+00:00Comment
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