Do Prepaid Cards or UPI Use Affect Your CIBIL Score?

Many of us enjoy seamless transactions using prepaid cards or UPI (Unified Payments Interface) apps. Whether sending money to friends, paying for groceries, or making online purchases, UPI and prepaid wallets have made financial transactions easy, fast, and convenient. 

However, a common question is: "Do prepaid cards or UPI transactions affect my CIBIL score?" If you plan to apply for a loan or credit card, it is essential to understand the relationship between digital payments and your credit score. 

Let’s explain it here.

First, What Is a CIBIL Score?

Your CIBIL score is a 3-digit number ranging from 300 to 900 that helps indicate your credit standing. It is calculated based on your credit behavior, including how responsibly you repay loans, how you use credit cards, and what your overall credit mix is like. 

A higher score generally means a higher chance of applying for and being successful in finding responsible credit sources.

UPI Payments and CIBIL Score — Is There a Link?

In short, no, UPI transactions do not influence your CIBIL score.

Here’s why:

• UPI (Unified Payments Interface) is a payment mechanism, not a credit facility.

• It only provides the means of transferring funds from your bank account to someone else's bank account.

• Since there is no borrowing or lending involved, UPI transactions do not get reported to the credit sections, like CIBIL.

So, whether you’re using Google Pay or PhonePe or Paytm, or some other UPI platform — it doesn’t matter, your use of the apps will not build or lower your CIBIL score.

Prepaid Cards and Your Credit Score

Prepaid cards are another well-known digital payment method. You load a specific amount onto them and use them like a debit card.

However:

• Prepaid cards do not involve credit.

• You are spending your own money, not getting credit from a bank or an NBFC.

• As a result, credit bureaus do not see your prepaid card use.

Therefore, just like UPI, there is no direct impact on your credit score from prepaid card transactions.

What Affects Your CIBIL Score?

To build or improve your CIBIL score, here’s what you need to focus on: 

• Paying your loans/credit card dues on time

• Using your credit limit wisely

• Have a balance of credit (secured and unsecured) 

• Having a long, clean credit history

• Minimizing the number of times lenders pull your credit (known as hard inquiries)

Want to Start Building Your Credit Score?

UPI and prepaid cards will not negatively affect your CIBIL score, but won't contribute to your credit profile either. If you want to build a stronger credit profile, taking small loans and paying them back on time is one of the best ways to begin.

Rupee112 is a reputable and trusted online platform that provides instant loans with quick approval and easy digital processing. This can be a smart option for anyone requiring credit immediately, while also trying to build or repair their credit.

Using digital forms of payment, such as UPI and prepaid cards, provides convenience, speed, and ease, but they are not connected to your credit score. If you intend to increase your CIBIL score, you will need to focus on borrowing responsibly, using the facility responsibly, and repaying promptly.