Does Checking CIBIL Score Affect CIBIL Score?

Estimated reading time: 5 minutes

Your CIBIL score plays a crucial role in your financial life. Whether you’re applying for a loan, credit card, or other financial products, your credit score helps lenders determine your creditworthiness. But many people wonder: does checking your own CIBIL score affect it? In this blog, we’ll clear up any misconceptions, explain different types of score checks, and share best practices for monitoring your score.

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Understanding CIBIL Score Checks

Before diving into whether checking your CIBIL score affects it, it’s important to understand the types of inquiries that can occur.

Types of CIBIL Score Inquiries

There are two types of inquiries related to CIBIL scores:

1. Soft Inquiries:

Soft inquiries occur when you check your own CIBIL score or when certain lenders conduct background checks that don’t involve a credit decision. These checks don’t have any impact on your score.

2. Hard Inquiries:

Hard inquiries, on the other hand, occur when lenders review your credit report while making lending decisions. For instance, when you apply for a loan or credit card, the lender performs a hard inquiry. These inquiries can affect your score if they happen too often within a short time frame.

Impact of Checking Your Own CIBIL Score

Self-Checks: Soft Inquiries

When you check your own CIBIL score, it’s considered a soft inquiry. A soft inquiry means you’re simply reviewing your score for your personal information and financial health.

Why Checking Your Own Score Doesn’t Affect It?

Unlike hard inquiries, soft inquiries don’t indicate credit risk to lenders. Checking your own score is simply you keeping track of your financial health, so it does not impact your score in any way.

Benefits of Regular Self-Checks

Regularly checking your CIBIL score can be a smart habit.

Here’s why:

• Monitor changes:
  You can track any fluctuations in your score to ensure you’re improving or maintaining it.
  
• Identify errors:
  You can spot mistakes or discrepancies in your report and dispute them before they impact your creditworthiness.
  
• Prevent fraud:
  Regular checks can alert you to any unusual activity or fraud in your credit accounts.

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When CIBIL Score Checks Can Affect Your Score

While checking your own CIBIL score doesn’t affect it, lender-initiated checks can, depending on the type of inquiry.

Hard Inquiries: When Lenders Check Your Score

Whenever you apply for a new credit card, loan, or any credit-related product, the lender performs a hard inquiry to assess your credit risk. A hard inquiry may lower your CIBIL score by a few points because it shows you’re seeking credit, which can indicate financial stress.

Impact of Multiple Hard Inquiries

Multiple hard inquiries within a short period can raise red flags for lenders. It could signal that you’re desperate for credit or struggling financially, which can negatively affect your credit score.

Time Frame for Hard Inquiry Effects

The impact of a hard inquiry generally stays on your CIBIL report for about two years. However, most of the negative impact fades within the first 6 to 12 months, and after that, the effect becomes negligible. To minimize the impact, avoid applying for multiple credit lines within a short time frame.

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Misconceptions About CIBIL Score Checks

There are many myths surrounding CIBIL score checks.

Let’s debunk a few:

Myth	Fact
Checking your own score lowers it.	Self-checks are soft inquiries and have no impact on your score.
Any inquiry affects your score.	Only hard inquiries initiated by lenders affect your score, and only slightly.
A single hard inquiry ruins your credit.	A single hard inquiry may lower your score by a few points, but it won’t drastically harm it.

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Best Practices for Monitoring Your CIBIL Score

To keep your CIBIL score in good shape and avoid negative impacts, follow these tips:

• Check your score regularly:
  This helps you stay on top of your credit and make informed financial decisions.
  
• Limit hard inquiries:
  Apply for credit only when necessary. Multiple hard inquiries in a short span can lower your score.
  
• Maintain a good credit mix:
  A healthy combination of secured (home loans, car loans) and unsecured loans (credit cards, personal loans) helps improve your score over time.
  
• Dispute errors:
  If you find any inaccuracies in your CIBIL report, address them immediately.

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Conclusion

In conclusion, checking your own CIBIL score does not impact your creditworthiness, as it falls under soft inquiries. However, multiple hard inquiries from lenders within a short period can lower your score slightly. So make sure to reguraly monitor your score, stay informed and prevent errors to protect your financial health. 

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Frequently Asked Questions