Credit Score Myths: Why Chasing 900 Is a Waste of Time

The 900 Score Fetish

In India, we are obsessed with exam marks. We think 99/100 is better than 90/100. We carry this same logic to Credit Scores.

You check your CIBIL score on Cred/GPay every month. You freak out if it drops by 5 points. You desperately want to hit that magical 900.

I have news for you: The bank doesn't care.

Myth 1: "A Higher Score Gets Me Better Loans" (The 750 Rule)

Reality: Credit Scoring is a Threshold System, not a Linear System.

For a bank underwriter, there are usually just three buckets:

• 750+: Excellent (Approved)
• 650 - 750: Borderline (Manual Review)
• Below 650: Risky (Rejected)

The Truth: An applicant with a score of 780 gets the exact same interest rate and approval chances as someone with 900.
Once you cross 750 (or 780 for premium cards like Infinia), any extra points are just vanity metrics. They serve no financial purpose.

Myth 2: "Checking My Score Lowers It"

Reality: There are two types of checks.

1. Soft Enquiry (You checking): When you check your own score on an app, it is a Soft Enquiry. Impact: Zero. Do it daily if you want.
2. Hard Enquiry (Bank checking): When you apply for a loan/card, the bank checks your score. Impact: -5 to -10 points.

The Real Danger: Applying for 5 cards in one week. This creates 5 Hard Enquiries. The bank's algorithm flags you as "Credit Hungry"—a sign of financial distress.

Myth 3: "Closing Old Cards improves my score"

Reality: This is the worst mistake people make.
Your score depends heavily on "Credit Age" (Length of Credit History, usually 15% of the score). If your oldest card is 5 years old and you close it, your average history drops instantly. Your score will crash.

Strategy: Never close your oldest credit card, even if you don't use it. Keep it alive buying one milk packet a year.

Myth 4: "Settling a Loan is Good"

Reality: "Settled" status is a death sentence for your report. It means you negotiated with the bank to pay less than what you owed.
This mark stays on your report for years. No other bank will touch you. Always "Close" a loan, never "Settle" it.

Myth 5: "No Cost EMI builds score faster" (The Mix Trap)

Reality: A loan is a loan, but the *type* matters.
Having too many "Consumer Durable Loans" (the technical term for Amazon Pay Later / Bajaj Finserv) actually hurts your profile compared to a proper Credit Card or Home Loan. Banks see you as someone who relies on petty credit for small items.

Conclusion

Stop gamifying your score. Just follow 3 rules:

1. Never miss a payment. (The big one).
2. Keep Utilization below 30% (Don't max out limits).
3. Don't apply for cards you don't need.

If you do this, whether you are 780 or 850, the banks will roll out the red carpet.