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Does checking your CIBIL score frequently lower it?

August 05, 2022 • 3093 views

Wondering if checking the CIBIL score affects the CIBIL score? Well, the answer is no, it does not. Rather, regularly checking your CIBIL score helps you monitor it, improving the chances of getting your loan approved. Therefore, if you frequently borrow credit, it is crucial to check your CIBIL score regularly. In this blog, we will discuss how checking your credit score often affects you. Read on!

What is Soft Inquiry?

When you check your credit score through the official CIBIL website, the process is called a soft inquiry. A soft inquiry does not change your CIBIL score at all. So, by regularly reviewing your credit report, you can monitor your credit actions.
A soft inquiry occurs in the following situations:
•    When you check your own credit score
•    When an employer or landlord checks your credit score 
•    When lenders check your credit before offering pre-approved credit cards

What is Hard Inquiry?

When you apply for any credit card, car loan or home loan, the lender requests your credit history before approving your loan or credit. This process of requesting your credit report is considered a hard inquiry. It can temporarily lower your CIBIL score by a few points. 
Moreover, if you apply for multiple loans or credit cards in a short time, the hard inquiries can lower your CIBIL score. It could result in rejection of your loan, and you may have to wait a few months before trying again for new credit.

Soft CIBIL Inquiry vs Hard CIBIL Inquiry

The following table highlights the difference between a soft inquiry and a hard inquiry:

Differences

Soft Inquiry

Hard Inquiry

Impact on credit score

It doesn’t impact your credit score.

Impacts your credit score

Reflection in credit report

It doesn’t reflected in the credit report

Reflects on your credit report

When is it carried out

For providing pre-approved offers

Before a loan or credit

Consent

No consent is required

Written consent is required

ALSO READ :- Check Your CIBIL Score For Free To Get A Personal Loan

Reasons for Lowering Your CIBIL Score

Here are some crucial reasons that may lead to a lowering in your CIBIL score:

1.    Repayment Behaviour
Your repayment behaviour is one of the most influential factors affecting your CIBIL score. Timely repayment of all your credit or loan will help you maintain a good CIBIL score. On the other hand, any default or missed payment will negatively affect your CIBIL score. 

2.    Exceeding Credit limit 
A credit limit is an upper limit on how much you can spend on your provided credit. It is vital that you adhere to the credit limit. Any spending more than your credit limit negatively affects your CIBIL score. 

3.    Unpaid Dues
Always clear your unpaid dues since it will allow you to plan your finances better. Any overdue repayment will negatively impact your CIBIL score. 
Along with the above-mentioned factors, there are a few other factors that can affect your CIBIL score negatively. These factors are paying only the minimum amount due, making multiple credit applications, errors in your CIBIL report, and not having a credit mix and credit history.
The following table indicates the importance of each factor in determining your CIBIL score.

Percentage

Factors

30%

Payment History

25%

Credit Exposure

25%

Credit Type and duration

20%

Other factors

Tips to Improve Your CIBIL Score

Improving your CIBIL score is an ongoing process. You can’t improve your CIBIL score in a day or two. CIBIL score is improved over a period of time; the longer the credit history, the better it is. 
So, how do you improve your CIBIL score?
Improving your CIBIL score is a straightforward process, and borrowers complicate it with poor financial habits. You can improve your CIBIL in the following ways:
1.    Regularly check your credit score.
2.    Paying your loan or credit on time.
3.    Properly using your credit. 
4.    Not taking multiple loans at one time. 
5.    Having good financial habits. 

To Conclude

Now that you have got the answer of whether checking the CIBIL score affects the CIBIL score, you can feel more confident about monitoring it regularly. This means you can check your score as often as you need without worrying about it having any negative impact on your credit rating. So, go ahead and check your CIBIL score whenever you want to stay informed about your credit health and make informed financial decisions.

Frequently Asked Questions

1.    Does checking my CIBIL score affect my credit rating?
Looking at your credit score might change your credit rating. If you find mistakes while checking your credit score, you can report them right away to fix them. Also, if your credit score is not good, you can take steps to make it better.

2.    How Can I minimise the hard inquiries?
To minimise hard inquiries, it is best to steer clear of pending credit applications and avoid opting for multiple credit applications.

3.    How frequently can I monitor my credit score?
It is a good idea to check your credit score every month, particularly if you are just starting to use credit. If you have been managing your credit well for the past few months, you can check it every 2 to 3 months.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

We are a team of expert writers and editors passionate about providing our readers with authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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