Impact of Loan Repayment on Your Credit Score

Your credit score reflects how reliably you manage borrowed money, and repayment behaviour is one of the biggest factors behind it. Each EMI payment, whether on time or delayed, is reported to credit bureaus such as CIBIL and reflected in your credit report. Consistent, on-time payments build a strong repayment history and support a healthy score over time. Missed or delayed payments, on the other hand, are recorded against your account and can bring your score down. Understanding this link helps you make informed decisions about how you manage your EMIs.

How overdue EMI damages your credit score

Each missed EMI lowers your score

Missed EMIs are reported to credit bureaus as a delay:

• A payment overdue by 30 days is recorded as DPD 30
• Continued non-payment moves this to DPD 60, then DPD 90
• Each stage reflects a longer delay and adds to the negative impact on your score
• Even a single missed EMI can lower your score, and repeated delays cause more serious, lasting damage

Settlement and write off tags are permanent red flags

• A settled account shows the loan was closed for less than the full amount owed
• A written off account shows the lender treated the debt as unrecoverable
• Both tags can remain on your credit report for up to seven years
• This can make new loan approvals harder, even after dues are cleared

How timely repayment rebuilds your credit score

Consistent EMI payment is the best score builder

Paying your EMIs on time, month after month, is one of the most effective ways to build a strong credit score. Lenders and credit bureaus view a steady repayment record as a sign of financial discipline. While there is no fixed timeline for every borrower, maintaining consistent, on-time payments over an extended period, generally spanning many months, tends to have a positive, cumulative effect on your score.

Clearing overdue is the first step

If you already have an overdue EMI, clearing it should be your priority. Until the overdue amount is paid, any new on-time payments on that account may not meaningfully improve your score, since the overdue status continues to weigh on your credit report. Once cleared, focus on maintaining timely payments going forward to gradually support your score's recovery.

DPD, or Days Past Due, shows how many days a payment is overdue and appears against each loan or credit account in your credit report. It updates every time your lender reports data to the credit bureau.

Higher DPD values signal a longer delay and a greater risk to lenders, and can have a more serious impact on your credit score than a shorter delay.

How to check if your repayment history has affected your score

You can check your credit score and report directly through CIBIL's official website, or through the Bajaj Finance app if you are an existing customer. Your report shows your DPD history for each account, along with any settled or written off tags. Reviewing this regularly helps you spot any errors early, understand how your repayment behaviour is being recorded, and take corrective steps, such as clearing overdue amounts, before they cause lasting damage to your score.

Tips to protect your credit score while repaying a loan

• Pay your EMI on or before the due date every month
• Set up a NACH mandate for automatic, on-time payments
• Clear any overdue EMI as soon as possible
• Avoid multiple loan applications within a short period
• Check your credit report regularly for accuracy
• Contact your lender promptly if you expect to miss a payment

Building these habits into your routine can help you maintain a healthy credit score and improve your eligibility for future credit.