Does Checking CIBIL™ Score Reduce Points?

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No. Checking your credit score will not reduce it. As a responsible individual, you need to stay updated on your credit scores. One common interest is whether checking your credit score has a negative impact. But there are various types of credit inquiries. When applying for a loan, you will need to undergo a credit check, either by a lender or a financial institution, to assess your creditworthiness.

Additionally, you can check your credit score to understand your credit standing. This amounts to a soft enquiry. Soft enquiries will not affect your credit scores.

What is a CIBIL™ Score?

The Credit Information Bureau (India) Limited is one of the four credit bureaus available and operating in India. Other credit bureaus are Equifax, Experian, and CRIF High Mark. CIBIL™ India has a tie-up with TransUnion of the USA, and the score given by CIBIL™ is known as the TransUnion CIBIL™ score. CIBIL Limited maintains the credit information of more than 600 million individuals and 32 million business entities.

CIBIL™ score is a three-digit numeric representation between 300 and 900. This is a representation of your credit standing in the financial world. Any score above 700 is considered a higher credit score. Chances are bright that your loan and credit card applications will be approved.

Types of Credit Inquiries

Credit inquiries are requests to the credit bureaus that examine the creditworthiness of individuals or entities in the financial world. These inquiries get reported and reflect on your credit report. These credit inquiries have an impact on your credit scores. These inquiries are categorized into soft enquiries and hard enquiries.

Soft Inquiries:

Soft enquiries occur when you check your personal credit score. Soft enquiries are also conducted when a lender checks your score with your permission to grant a pre-approved loan or credit card. Some of the examples of a soft inquiry include:

• Checking your own credit score will not bring down your credit score.
• Lender checking to grant a pre-approved loan or a credit card.
• Employer checks your credit score.

What One Needs to Know?

• Soft enquiries do not appear on your credit report and thereby do not reduce your score.
• Soft enquiries can be viewed only by you.

Hard Inquiries:

When you apply for a loan or a credit card, it amounts to a hard inquiry. In this case, the lender contacts the credit bureaus directly and checks your credit report. This is to assess your creditworthiness. Hard inquiries can hurt your credit scores. Multiple hard inquiries within a short period of time indicate that you are a credit-hungry person and will lower your credit score further. Some situations where your credit report is likely to undergo a hard inquiry include:

• Applying for a loan or credit card
• Applying for an Auto loan or an education loan
• Requesting a balance transfer
• Requesting a credit limit increase
• Co-signing a loan agreement

What One Needs to Know?

• Lenders conduct a hard inquiry on your credit report to assess your creditworthiness and repayment capacity.
• An authorization from your part is required, and it lasts on your credit report for more than 2 years.

Does Checking CIBIL™ Score Reduce Points

Not all credit score checks will bring down your credit score. Having a better understanding of what a hard enquiry and a soft enquiry are will definitely help. Checking your own credit score amounts to a soft enquiry. It might not have a negative impact. Moreover, checking your credit score frequently also helps you to have a clear-cut idea of your financial standing. You can always adopt some financial habits and accelerate your score.

When a lender checks your credit score and credit history during a loan application, it can lower your score. These checks are done to assess your creditworthiness and determine whether you will be able to repay the loan on time. It is highly recommended not to do too many credit enquiries within a short span of time. This might amount to multiple hard enquiries and ultimately your credit score will suffer.

Some myths on CIBIL™ Score Checks

The following table clearly encapsulates the most common myths on CIBIL™ score checks and the fact that surrounds them.

How to Find Who is Checking My Score?

There will always be curiosity from your side as to who is checking your credit score. Your credit reports contain a list of individuals and entities who do a score check on you. You can investigate your credit report and dispute any incorrect entries reported; you can always raise it as a dispute with the CIBIL™. However, you must provide supporting documents to substantiate your claim. Removing credit score errors can also help you improve your score.

Why Should You Regularly Check Your CIBIL Score?

Regularly checking your credit report helps you stay updated on your credit score. If your credit score drops, you can identify the reasons and start rebuilding it with prudent financial habits. Even if your credit score improves, you can review it again to see how much it has increased. And by adopting those prudent practices, you can achieve financial freedom.

Benefits of Regular Credit Score Checks

• Effects of Regular Actions: Regularly checking your credit score helps you monitor whether you are on the right financial path. If the financial actions are yielding positive results, you can then accelerate those actions to your advantage. However, if the financial actions are yielding negative results, you can revisit and rework them.
• Ensure Accuracy: Sometimes, a low credit score can result from an unscrupulous entry in your credit report. Your credit bureaus will help you get the credit reports rectified.
• Better Offers: When you check your credit score and find an increase due to prudent financial actions, you may be more likely to attract better loan and credit card offers. A high credit score will increase your creditworthiness and give you better negotiating power when you apply for a loan.
• Builds Confidence: It also helps you to build the confidence you require before applying for credit. Regularly monitoring your CIBIL™ score allows you to take control of your credit health and achieve financial freedom faster. 

How to Check Your CIBIL™ Score Online?

There is a list of steps that need to be followed to check your CIBIL™ score online. They are:

1. Log in to the Official CIBIL™ Website.
2. Click the Get Your Free Credit Score & Report button.
3. Fill in the personal details in the form.
4. You need to provide a valid form of identification. This ID could be either your Passport, PAN, Voter's ID card, Driving License, or Ration Card number.
5. Click the Accept and Continue button.
6. An OTP is sent to the mobile number you have registered.
7. Enter the OTP and click Confirm.
8. There will be additional questions asked based on your identity.
9. Once the verification is done, you can view your credit score and your credit report.
10. CIBIL gives you one free credit report each year for reviewing your score.
11. In case of frequent updates, you can also subscribe to various paid plans.

Conclusion

Regularly checking your credit score helps you understand the results of your financial actions. It also gives you an idea whether your score has increased or dropped. You can constantly adjust your financial actions to help boost your score. This action will also help you to spot errors and take timely action to improve your creditworthiness. Do not hesitate to track your credit score frequently, as it will help you to have control over your financial future.