Does Checking Your CIBIL Score Reduce It?

Every time your CIBIL score is checked, it is recorded as either a soft inquiry or a hard inquiry, and only one of these can affect your score. All financial institutions follow a strict process before approving your application. It can be for a loan, credit card, or other credit facility. One of the crucial steps in the process is reviewing your credit report and CIBIL score.

This numerical representation of your creditworthiness influences everything from approvals to interest rates. Proactively checking your CIBIL score helps you identify healthy financial habits and maintain a good score. Understanding the difference between soft and hard inquiries can help you monitor your credit health responsibly and confidently.

Credit inquiries are of two types, depending on who is making the inquiry and the purpose behind it. These are described below-

Soft Inquiries

• When you check your credit score, it is called a soft inquiry.

• An inquiry of your credit profile by an employer, insurance company, or landlord is also considered a soft inquiry.

• The purpose of these inquiries is to get a glimpse of your financial situation and not to get in-depth details. 

• The record of this type of credit inquiry stays for one or two years on your credit information report.
   

Hard Inquiries

• This type of inquiry only takes place when a financial institution checks your credit report and score.

• This type of credit check is associated with any application and approval process.

• You can avoid these by restricting pointless applications for credit and only applying with careful thought.

• If a financial institution checks your credit because you applied for a loan or a credit card, but you didn't apply- it could indicate potential fraud.

• Hard inquiry stays on your credit report for up to two years.
   

Based on the type of inquiry, you can take the right action to maintain your score.

While checking your own CIBIL score does not affect it, several other factors can influence your credit score positively or negatively. These include:

• Soft inquiries (checking your own score): These have no impact on your credit score and are useful for monitoring your credit health.
  

• Hard inquiries (lender-initiated checks): When banks, NBFCs, or credit card issuers typically review your credit profile during an application process, your score may dip slightly. Multiple hard inquiries within a short period can have a greater impact.
  

• Payment history: Not paying your loan or credit card dues on time plays a crucial role in calculating your credit score. Missing a single payment can harm your score by 100 to 150 points.
  

• Credit utilisation: Using more than 30% of your available credit limit may indicate higher dependence on credit and can bring down your score. Frequently paying only the minimum amount due can also negatively affect your credit profile.
  

• Age of credit: A longer and well-managed credit history generally improves your score. Maintaining older credit accounts can contribute positively to your creditworthiness.
  

• Credit mix: Managing a balanced combination of secured and unsecured credit responsibly can strengthen your credit profile and support a higher score.
  

• Debt-to-income ratio: A higher Debt-to-Income Ratio (DTI) may indicate financial stress. Maintaining it around 30% to 35% can help support a healthy credit profile.
  
  

Understanding these factors can help you build responsible credit habits and support long-term credit health. If you are looking for practical ways to strengthen your credit profile, you can also explore how to improve CIBIL score for tips on improving your repayment behaviour, managing credit utilisation, and maintaining a healthy credit history.

You can find out who has checked your CIBIL score by reviewing your credit report. Credit reports typically contain an enquiry section that records both soft and hard inquiries made on your profile over a period of time. This section generally includes the name of the institution that accessed your credit information and the date of the enquiry. Reviewing these records periodically can help you identify unauthorised credit checks, detect potential fraud, and understand which lenders have recently assessed your creditworthiness. You can regularly check your CIBIL Score online and monitor associated enquiries.

Since checking your own CIBIL score is considered a soft inquiry, you can check it as often as needed without affecting your credit score. As a general practice, reviewing your score once every month or every time your credit report is updated can help you stay informed about your credit health. If you are unsure how to check CIBIL score online, you can review the available methods and access your credit information through authorised platforms. It is also advisable to check your score before applying for a loan or credit card. Regular monitoring allows you to detect reporting errors, identify suspicious activity, and address discrepancies before they impact your borrowing plans.

You can follow these tips to keep your credit score healthy:

• Do not apply for many financial products in a short period to avoid multiple hard inquiries.

• Pay your dues on time by using autopay options.

• Borrow only what you require and manage your credit responsibly.

• Check for any discrepancies in your credit report with periodic checks.

• Explore different types of credit rather than sticking with unsecured loans.

• If you need funds for shopping, consider a consumer durable loan or the ‘Buy Now Pay Later’ option.

While checking your own CIBIL score does not reduce it, there are certain situations where monitoring your score is particularly important:

• Check your credit score in an interval of 30 to 45 days, which is the time taken for CIBIL to update your score.

• Make sure to apply for credit only if you meet all the other eligibility criteria set by the lender or issuer to reduce the chances of rejection after the hard inquiry, which can further reduce your score.

• Check your score a month after you have closed a credit account to ensure it is recorded in your credit report accurately.

• If you suspect any discrepancy in your score due to fake loans or misreporting, it is the ideal time to check it.

• If you get any scam calls about delays in repayment for a loan you have not taken, generate your credit report to ensure there is no fraudulent activity in your name.

On Bajaj Markets, you can get your free credit report and score to keep up with updates on your credit health.