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5 Bad Credit Habits & How to Break Them
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It can harm your credit score and may remain on your credit report for up to seven years.
Yes, as long as you don’t cross your credit utilisation threshold and make full payments on time, using one card is fine. It also keeps tracking expenses easier.
They also consider your employment stability, income proof, existing obligations and repayment history with specific institutions.
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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It often begins with small slips—an unplanned swipe here or a missed due date there. Over time, these patterns silently take shape and ultimately affect your creditworthiness. Many people today seek clarity on why their credit score doesn’t reflect their financial potential, even when income or spending doesn’t seem out of hand. The answer often lies in certain habits that while seemingly harmless, lead to long-term damage.
Let’s help you identify such habits and offer actionable ways to overcome them.
1. Carrying outstanding balances month after month
When you don’t pay off your credit card bill entirely, you’re not just inviting interest charges- you’re also lowering the available credit you can use which makes it seem like you’re overly reliant on borrowed money. This leads to a higher credit utilisation ratio, one of the most significant factors considered by credit bureaus like CIBIL and Experian India.
How to fix this:
Set a reminder a few days before the due date and automate payments where possible. Consider converting large purchases into manageable EMIs to avoid a ballooning interest burden.
2. Using credit cards as a substitute
Relying solely on credit cards in times of crisis is a common mistake. This can quickly turn into a cycle of debt if not handled prudently. It’s tempting to swipe when faced with a sudden medical bill or car repair, but repeated reliance on this method creates repayment pressure.
How to avoid this:
Begin building an emergency fund, even if it means starting with ₹500 a month. Until then, explore structured solutions like a personal loan on credit card, which offers lower interest rates than revolving credit card debt and ensures a clear repayment plan.
3. Applying for multiple credit products in short spans
Every time you apply for a new credit card, a hard inquiry gets recorded on your credit report. Too many applications in a short time make lenders view you as high-risk even if your income or repayment history is stable.
How to fix this:
Be selective. Apply only when necessary and after checking your eligibility through pre-approved offers or soft checks. You can often view pre-qualified personal loan on credit card offers that don’t impact your score.
4. Ignoring your credit report and score
A surprising number of individuals have errors in their credit report—wrong entries, outdated data, or unresolved dues that they were never informed about. Not reviewing your report regularly can keep you in the dark about these issues.
How to avoid this:
Access your free full credit report once a year from RBI-authorised bureaus like CIBIL or CRIF High Mark. Review it line by line. If you spot an error, then raise a dispute immediately through the bureau’s official portal.
5. Closing old credit cards without strategy
Older cards help build a strong credit history, which is good for your score. When you close them, not only do you shorten that history, but you also lower your total available credit. This makes it look like you’re using a larger share of your limit even if your actual spending stays the same—which can hurt your credit profile.
How to fix it:
Before closing any card, evaluate its contribution to your credit age and limit. If the card has no annual fee or offers legacy benefits then consider retaining it. Some banks also allow you to downgrade to a basic variant to retain credit history without high fees.
Your credit history shapes your ability to access financial opportunities including attractive credit cards. Making conscious decisions and avoiding reactive credit usage can position you for better financial confidence. Kotak Mahindra Bank offers flexible repayment structures and curated tools that support responsible credit behaviour.
Credit habits take time to build, and just as long to fix. But the first step is always awareness—followed by consistent action.
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