Numerous other elements also affect your credit score, even if your credit repayment patterns are the main determinant. Inflation is one of these factors. Although it is unlikely that inflation has a direct effect on your credit score, it does have some influence.

Your purchasing power tends to decline when food and other item prices rise over time. As a result, using more credit to maintain the same standard of living is not unusual. Your credit score suffers as a result of increased credit use.

Inflation may affect your credit score for several reasons. Repo rates are increased when inflation stays beyond the RBI's comfortable 4% level. As a result, borrowing becomes more expensive overall, which affects your ability to make loan repayments on schedule.

In order to prevent a decline in your credit score, it is crucial to be cognisant of inflation and adjust your credit requirements appropriately.

Take these actions to keep your credit score from dropping.
I. Spending patterns: You must modify your spending patterns to reflect inflation. You have to pay the minimal amount owed each month, if not the whole amount, if your credit becomes too high.

II. Keeping an eye on your score: Keeping an eye on your credit score periodically is another harmless advice. You can maintain control over your score by doing this.

III. Invest in inflation-beating assets: It is advised to make investments in equities and real estate that outperform inflation. You could set away a little amount of your funds in assets that are resistant to inflation rather than putting it into a savings account or fixed deposit (FD).