Effects of PAN Card on Credit Score

A Permanent Account Number or PAN is different from your credit score. While credit score is a numeric representation of your financial creditworthiness. PAN is a unique alpha-numeric identification number issued to Indian nationals. PAN Card is one of the important documents that helps in preventing tax evasion and acts as proof of identity. Because PAN is a unique number, two people cannot have the same PAN number. As per Section 139A (7), one person can have only one Permanent Account Number. Even if you lose your PAN card, you can get a duplicate one with the same number.

So, if you change your PAN card or number, then your credit score will not be affected. Credit score has other details such as your date of birth, banking transactions, residential address, etc. So, in case your PAN number has been changed, then the CIBIL software will show a warning in your account. To boost up your credit score, one should not change his or her PAN number frequently.

If you want to improve your score, you can follow the below-mentioned tips-

Tips to Improve Credit Score

These following tips will help you to boost your credit score-

  • Make your outstanding credit card bills and loan EMIs payments on time.
  • Keep your credit utilization ratio as low as possible, usually below 30%.
  • Apply for credit only when required.
  • Check your credit report and score consistently and if you find any mistakes, rectify them immediately.
  • Don't close your oldest credit card account as it will have a positive impact on your credit score.

Impact of PAN and Aadhaar on Credit Score

PAN Card has been issued by the Income Tax Department. It contains a 10-digit number, whereas the Aadhaar number is generated by UIDAI (Unique Identification Authority of India) and has 12-digit unique numbers.

Recently, the government of India has made it mandatory to link Aadhaar number to PAN card to file tax returns. Anyone not abiding by this rule need to face the consequences of rejected ITR by the Income Tax Department.

Both the Aadhaar Card and your Credit Score is important for an individual as it builds a unique identity of an individual.

Benefits of Linking PAN and Aadhaar on CIBIL

Linking of PAN and Aadhaar is mandatory and can have a positive impact on your credit score. An individual can link Aadhaar Card and PAN either by logging into the e-filing portal or by using SMS facility. Mentioned below are some of the benefits of linking both the documents.

  • Linking PAN and Aadhaar will prevent individuals from using the same PAN number. As this will create problem for those who have never availed any loan or credit card before.
  • For logging into any credit bureaus website, providing PAN number is mandatory as it authenticates one’s individuality. This cuts down the duplication as Aadhaar number is linked.
  • In rural areas, individuals can now use Aadhaar enabled micro ATMs to withdraw cash. This makes them eligible to apply for any credit product.
  • PAN card and Aadhaar number linking make it easier to track individuals who use multiple PAN cards and apply for a loan frequently in different banks. This helps banking organizations to figure out an individual who is involved in practicing fraud activities.
  • Using your Aadhaar card, credit score can be easily accessed. This proves useful when you plan to apply for a loan or credit card.

In a nutshell, changing your PAN or Aadhaar number doesn't impact your credit history or score. Even if your card has been stolen and you want to issue a new one, then you can get the duplicate documents with the same number.