Summary of this article
Paying only minimum dues builds interest, increases debt over time.
Multiple credit applications temporarily reduce score; space applications strategically.
EMIs affect borrowing capacity; timely payments protect and improve score.
By Akshay Aedula, Product and Growth, CRED
Every move you make with money sends a signal. Pay on time, you look reliable. Miss a payment, trust erodes. Applying for too much credit too fast, reads as desperation.
That's because credit scores are designed to help financial institutions judge risk. This is why the rules often feel unintuitive: some choices that seem smart can hurt you, while others that look risky can actually help when done strategically. The difference lies in timing, discipline, and knowing how lenders read your behaviour.
Here's how your everyday habits shape your credit and how to make each one work for you.
What happens if I only pay the minimum due on my credit card?
Paying the minimum is a trap disguised as convenience. You avoid late fees and protect your credit score in the short term, but the real cost builds silently in the background. For example, if you owe Rs 50,000 on your card and only pay the minimum due of around Rs 2,500, at an interest rate of 40–60 per cent per year, it could take you a decade or more to clear the balance, and you might end up paying well over Rs 1 lakh in interest by the time you're done.
Most of each payment feeds interest, not your actual balance. Meanwhile, high utilisation from carried balances signals financial stress to future lenders.
Does applying for multiple credit cards or loans affect my credit score?
Yes, but timing and strategy matter. Every time you apply for a credit card or loan, the lender runs a hard inquiry on your report. That usually shaves 3–5 points off your score.
Apply for too many cards in a short span, and lenders may see it as risky behaviour- your score can dip further, especially if your history is thin.
The good news: credit scores often bounce back within a few months if you avoid repeated applications. As a rule of thumb, space out new applications by at least three to six months to stay on the safe side.
Does converting purchases into EMI affect my credit score?
Converting purchases to EMI doesn't directly hurt your credit score, but it changes how your credit looks to lenders.
The upside: EMI conversions can lower your credit utilisation instantly. If you convert a Rs 50,000 purchase to EMI, it often moves off your regular credit limit, freeing up available credit. Lower utilisation helps your score.
The reality check: You're still carrying debt, just repackaged. Lenders see EMI obligations when evaluating new credit applications. High EMI commitments can limit your borrowing capacity even if your credit score looks healthy.
Payment discipline matters most. Miss an EMI payment and it hits your score just like any other missed payment. The convenience of smaller instalments doesn't change the consequence of defaults. EMIs work best as a cash flow tool, not a credit score strategy. Your score benefits from responsible usage, not creative repayment structures.
How long do negative marks, like late payments, stay on my credit report?
Late payments stay on your credit report for up to 7 years from the date they occurred. Their sting, however, fades with time- a 30-day late from two years ago hurts less than it did when it first happened, because credit scores weigh recent history more heavily than old missteps.
Defaults and settlements also remain for 7 years, but the same rule applies: the older they get, the less influence they carry.
New positive behaviour helps right away. Every on-time payment and responsible credit move begins to offset past mistakes, and lenders usually pay more attention to your recent pattern than ancient history.
