One of the biggest factors that play a role in your CIBIL score calculation is your repayment history. In other words, how punctual you are with your EMI payments, credit card payments, etc. affect how low or high your score is.

Timely payments boost your score, but late payments can cause damage too. That said, if you have missed a single payment, then how big of damage can it actually cause? Let's find out.

Late Payments and CIBIL Score

It's no secret that late payments can lead to a low CIBIL score. However, the actual damage varies from one person to another. Plus, a lot of times the lenders don’t report a single late payment to the credit rating agencies.

There are many banks and other financial institutions that give their borrowers a grace period of 30 days. So, even if you are late with a particular EMI or credit card bill but clear it within a month past the deadline, your score may not get hurt. In addition to that, if you are lucky, then your bank could be using an advanced analytics system that takes into account your past repayment records. So, if you have been consistent with your payments in the past, then the bank may overlook a single late payment.

Worst Case Scenario

There are some banks that take late payments very seriously. So, it's possible that even a single late payment of yours get reported, which may lead to a low CIBIL score. That said, the actual damage depends on the following factors:

• Days Past Due: Days Past Due, which is generally known by its acronym DPD represents the numbers of days that have passed by since the actual payment date. A DPD is divided into 4 categories which are 000, 030, 060, and 090. When you pay a bill without delay, then the payment is put under the "000" category. If you are late by a month, then the category 030 is chosen. Similarly, if the payment has been delayed by more than 2 months or 3 months, then the categories 060 and 090 are selected, respectively. The higher is the DPD of your payment, the bigger will be damage.
• Repayment history: The bigger is the gap between your recent late payment and the previous late payment, the better it is for your CIBIL score calculation.

Dealing with the Problem

If you were late with a particular payment recently, then you can't change what's happened. You can only hope that it won't affect your credit profile. However, it should also serve as an eye-opener and force you to be better prepared for the future.

To ensure that you are never late with an EMI payment ever again, the following tips can help:

• Create a monthly budget and account for all the major expenses. In addition to that, set a portion of your income aside as emergency funds. Even after this, enough money should be left for your EMIs. If that's not the case, then you can reduce some of your expenses. For instance, if like to go to the movies every week, you can drop that to 1-2 movies per month, etc.
• If your expenses are too high, then you can also get a credit card with a decent limit. This way, if in a particular month, you are unable to pay the EMI, you can use your credit card for it.
• Check your credit report frequently. Sometimes banks accidentally report a late payment even though you have paid on time. If there is a mistake like this, then you can resolve it by contacting the bank. In doing so you can protect your score from taking damage that's not warranted.

Your repayment history plays the biggest role in CIBIL score calculation. Thus, you must take it seriously and try to be punctual with every single payment.