Diwali 2026: How Festive Spending Can Affect Your Credit Score
Diwali is a season of shopping, travel, gifting and celebrations. Many people use credit cards, personal loans or EMIs to manage these expenses. But can festive spending affect your credit score?
Yes, Diwali spending can affect your credit score indirectly. Your spending itself does not automatically lower your score. However, high credit utilisation, missed payments and multiple credit applications can negatively affect your credit profile.
In September 2026, India had 12.53 crore credit cards
in force, with credit card spending expected to increase during the October-November festive period.
How Does Diwali Spending Affect Your Credit Score?
Diwali spending can affect your credit score when it leads to:
- High credit utilisation: Using a large portion of your available credit limit.
- Missed payments: Delaying credit card bills or loan EMIs.
- Multiple credit enquiries: Applying for several loans or credit cards within a short period.
- Higher debt burden: Taking on more credit than you can comfortably repay.
- To protect your credit score during Diwali, plan your spending, keep credit utilisation under control, make payments on time and avoid unnecessary credit applications.
What Happens to Your Credit Score When You Spend More During Diwali?
Imagine you have been planning to buy a new car for months. During Diwali, you find a dealer discount and a pre-approved loan offer.
You finance the car through a loan, use your credit card for insurance and make additional purchases for clothes, gifts and home appliances.
Each expense may seem manageable individually. However, together they can increase your credit utilisation and monthly repayment obligations. This is where festive spending can start affecting your credit profile.
Does High Credit Card Utilisation Affect Your Credit Score?
Yes. High credit utilisation can negatively affect your credit score.
Credit utilisation is the amount of your available credit that you are currently using. For example, if your credit card limit is ₹1 lakh and your outstanding balance is ₹70,000, your utilisation is 70%.
Using a large portion of your available limit can indicate greater dependence on credit. During Diwali, avoid spending up to your full credit limit simply because the credit is available.
Can Paying Only the Minimum Due Affect Your Credit?
Paying the minimum amount due can keep your account from becoming immediately overdue, but it leaves the remaining balance unpaid.
That outstanding balance may continue to attract interest according to your card's terms, increasing your overall debt.
Before making large festive purchases, consider whether you can comfortably repay the amount rather than relying only on the available credit limit.
Do Multiple Loan Applications Affect Your Credit Score?
Yes, multiple formal credit applications can result in multiple hard enquiries on your credit report.
During the festive season, you may see offers for personal loans, credit cards, consumer loans and other forms of credit. Applying to several lenders within a short period can result in multiple enquiries.
These enquiries may affect your credit score and can also make lenders more cautious when assessing a new application.
A better approach:
compare interest rates, fees, eligibility criteria and repayment terms first. Apply only when you have identified the credit option that suits your requirements.
Can Missing an EMI or Credit Card Payment Lower Your Credit Score?
Yes. Missed or delayed payments can negatively affect your credit profile.
Payment history is an important part of your credit profile. If festive spending leaves you unable to pay your credit card bill or loan EMI on time, the resulting delay can affect your credit history.
Set payment reminders or use automatic payments where appropriate to avoid missing important due dates.
Should You Check Your credit Score Before Taking a New Loan?
Yes. Checking your credit score and credit report before applying for new credit can help you understand your current credit position.
Reviewing your report can also help you identify incorrect account information, unexpected enquiries or other discrepancies before submitting a new application. Checking your own credit score does not hurt your score.
How Can You Protect Your Credit Score This Diwali?
Follow these simple steps before and during your festive spending:
- Set a Diwali spending budget before making major purchases.
- Keep credit utilisation under control rather than using your entire available limit.
- Pay credit card bills and EMIs on time.
- Avoid unnecessary loan and credit card applications.
- Consider your existing EMIs before taking on additional debt.
- Review your credit report before applying for significant new credit.
- Plan repayment before making large purchases, especially when using EMIs or credit cards.
The objective is not to avoid credit completely. It is to use credit in a way that remains manageable after the festive season ends.
Frequently Asked Questions
- Does Diwali shopping affect your credit score?
Diwali shopping does not directly reduce your credit score. However, high credit utilisation, missed payments or multiple credit applications resulting from festive spending can affect your credit profile.
- Does using a credit card during Diwali lower your credit score?
No. Simply using a credit card does not lower your credit score. However, consistently using a large portion of your credit limit or missing payments can negatively affect your score.
- How does credit card utilisation affect credit score?
Credit card utilisation refers to the amount of your available credit limit that you are using. Higher utilisation can indicate greater dependence on credit and may negatively affect your credit Score.
- Do multiple loan enquiries reduce your credit score?
Multiple formal loan applications can create hard enquiries on your credit report. Several enquiries within a short period may affect your credit Score.
- Should I check my credit score before applying for a loan?
Yes. Checking your credit score and credit report can help you understand your credit position and identify potential errors before applying for new credit. Checking your own score does not negatively affect it.
- How can I maintain a good credit score during the festive season?
Plan your spending, keep credit utilisation under control, make loan and credit card payments on time, avoid unnecessary credit applications and regularly review your credit report.
Frequently Asked Questions
CIBIL is a repository of information that collects and maintains the data provided by Banks and NBFCs, where individual have or had loans in the past. It has information about individual past and present repayment history and the status of individual loan accounts, personal information such as individual identity information, employment history, contact information, etc. It also keeps track of all the enquiries that individual has made for credit from various banks and financial institutions.
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