High Credit Limit, Low Use: Your CIBIL Wins?

Having a high credit card limit but spending little of it lowers your credit utilisation ratio, which is one of the biggest factors in your CIBIL score. Here's exactly how it works and what you should do.

Here's what happened: Credit utilisation ratio — your total card spend divided by your total credit limit — contributes roughly 20-30% to your CIBIL score calculation.. Using ₹70,000 of a ₹5 lakh limit gives a 14% utilisation rate, well inside the ideal sub-30% threshold that credit bureaus reward.. Banks typically report your card balance to CIBIL once a month, often mid-cycle, meaning high spends can hurt your score even if you pay in full on the due date..

What you should do: Check your current utilisation: add up outstanding balances across ALL your credit cards and divide by total combined limits — keep the result below 30%.. Call your bank and request a credit limit increase if you have a clean repayment history — a higher limit on the same spend immediately drops your utilisation ratio.. Avoid closing old or unused credit cards; doing so reduces your total available limit and can spike your utilisation ratio overnight, hurting your CIBIL score..

If your bank reports balances mid-cycle, make a part-payment before the reporting date — not just before the due date — to show a lower utilisation to CIBIL.