Do EMI Cards Affect Your Credit Score? Explained Simply

Posted on by Ariana Davis
Credit score.

 

Overview: EMI cards allow users to convert purchases into manageable instalments. But many wonder if these cards affect their credit score. This blog explores the impact, myths, and truths surrounding EMI cards and credit ratings in India, helping you understand their role in financial well-being.

Do EMI Cards Impact Your Credit Score in India? Here’s the Truth

In India, the credit score is a powerful indicator of one’s financial health. According to CIBIL, a score above 750 is generally considered good, and most of the loans are approved for individuals within this range. 

With the rise of EMI cards, such as the Airtel Bajaj Insta EMI card, more consumers are accessing flexible payment options. But does using such cards influence your credit score? The short answer: yes, but it depends on how you use them.

What is an EMI Card?

An EMI (Equated Monthly Instalment) card is a financial product that converts high-value purchases into smaller, manageable monthly instalments. These are typically digital cards with a pre-approved credit limit.

Key Features:

  • Pre-approved loan (up to ₹3 lakhs in most cases)
  • Flexible tenures (ranging from 3 to 60 months)
  • Zero or minimal down payment
  • Accepted at both online and offline merchants
  • Quick digital approval process

How EMI Cards Can Affect Your Credit Score

Your credit score reflects your financial habits, and EMI cards can influence it more than you think.

Factor Impact on Credit Score Notes
Timely EMI Payments Positive Boosts creditworthiness and builds a strong payment history
Missed or Delayed Payments Negative Lowers your credit score and flags you as a high-risk borrower
Credit Utilisation Moderate High usage can lower your score if you’re near your credit limit
Multiple EMI Cards Mixed Too many accounts can be risky, affecting the average account age
Closure of EMI Card Slight Negative Can reduce your available credit limit temporarily

 

What You Must Know: Even though EMI cards are not credit cards, your usage patterns still get reported to credit bureaus.

Differences Between EMI Cards and Credit Cards

Though both offer credit access, EMI cards and credit cards differ significantly in usage, cost, and impact.

Feature EMI Card Credit Card
Purpose Used mainly for specific item purchases General usage including cash withdrawals
Interest Often zero or low interest Higher interest (up to 42% p.a.) if not paid fully
Application Process Quick, mostly digital Can involve income and credit checks
Credit Impact Yes, through bureau reporting Yes, with more weightage on repayment patterns
Example Apply for Airtel Bajaj Insta EMI card Standard Bank Credit Cards

Responsible Usage of EMI Cards

To ensure your credit profile remains healthy, follow these best practices:

Do:

  • Pay all EMIs on time—set reminders or auto-debit
  • Maintain a low balance relative to your card’s limit
  • Review your CIBIL report regularly for errors
  • Close EMI transactions responsibly before applying for large loans

Don’t:

  • Take multiple EMI cards unnecessarily
  • Max out your EMI limit
  • Delay payments thinking there’s a grace period
  • Ignore small EMIs—they count too

In fact, many responsible users enjoy the Airtel Bajaj Insta EMI card benefits, such as no-cost EMI offers and flexible repayment tenure, making them reliable without impacting scores negatively.

Mistakes to Avoid: Using multiple EMI cards or missing payments can significantly damage your credit profile.

EMI Cards and Credit Score Myths

Let’s clear some common misconceptions:

  1. EMI cards don’t affect credit score.
    ✘ False. Your payment behaviour does get reported.
  2. EMI cards are not real credit.
    ✘ Misleading. They are credit instruments with defined repayment obligations.
  3. Closing an EMI card boosts score.
    ✘ Not necessarily. It may actually reduce your total credit limit.
  4. All EMI cards are the same.
    ✘ No. Some, like the Airtel Bajaj Insta EMI card, offer better terms and approvals via platforms like Airtel Finance.

 

Alt Text: Checking credit score.

Link: https://www.freepik.com/premium-photo/credit-score-concept-businessman-using-smartphone-with-credit-score-checking-rating-business-personal-loan_372775759.htm#fromView=search&page=1&position=38&uuid=1568694c-35bb-4711-a605-360b03c27f0d&query=EMI+Cards+Affect+Your+Credit+Score 

How to Apply for EMI Cards Easily?

Digital onboarding has made applying for EMI cards simpler than ever. For instance, users can now apply for an Airtel Bajaj Insta EMI card via the Airtel Thanks app by completing a few steps:

  1. Visit Shop > Airtel Finance in the app
  2. Select EMI card and complete KYC
  3. Pay a joining fee of ₹530
  4. Get instant digital approval and begin shopping

This smooth process is helping many Indians embrace easy EMIs without visiting branches or filling out lengthy forms. Apply for an Airtel Bajaj Insta EMI card in just a few minutes!

Benefits of EMI Cards Beyond Credit Score

While improving credit score is one aspect, EMI cards also provide:

  • Affordability: Buy now, pay later without burden
  • Convenience: Digital, quick, paperless process
  • Wider Access: Shop across 1.5 lakh+ stores
  • Flexible Tenures: Choose from 3 to 60 months

Who Should Use EMI Cards?

EMI cards are ideal for:

  • Salaried individuals looking for affordable upgrades
  • Young professionals building credit history
  • Families managing appliance purchases
  • Small business owners with regular equipment needs

Credit Score and EMI Cards—Handle with Care

EMI cards can support your credit score when used wisely but harm it if mismanaged. Consistency in repayment, low utilisation, and financial awareness are key. Treat EMI cards as a tool—not a trap. Maintain control, and they’ll serve your goals well. Start your EMI journey with Airtel Finance today!

FAQs

  1. Can missing an EMI payment lower my score?
    Absolutely. Missed payments negatively impact credit scores and remain in your report for years.
  2. Is using a full EMI card limit risky?
    Yes, high utilisation lowers credit scores and signals possible financial stress to lenders.
  3. Will an EMI card help build credit history?
    Yes, regular on-time EMI payments help establish a strong, reliable credit repayment track record.
  4. Can I apply for multiple EMI cards?
    You can, but multiple cards may reduce average credit age and raise inquiry count.
  5. Is closing an EMI card bad for credit score?
    Sometimes. It may lower available credit and affect your overall credit utilisation ratio.

References

Related Posts