In India, about so percent of loans are approved by seeing the credit score of the applicant. Now we can very well imagine how important is our CIBIL Score in today’s scenario. There are several factors which affect the CIBIL Score like payment history, length of credit history, type of loans such as secured & unsecured & number of inquiries made by an applicant for new credit. If you made so many inquiries for new credit
It indicates your greedy behavior which reduces your CIBIL score drastically.
Checking your CIBIL score will never hamper your CIBIL score as long as it done by you just for information but in case it is done by a Bank or lender for investigation purpose, it will surely have a negative impact on your credit score. To understand this in a better way let us divide the queries in 2 parts i.e. hard queries & soft queries. Let us discuss both of them in detail one by one:-
1) Effect of hard query on CIBIL score:-
Let us know what is a hard query? Whenever any consumer apply for any kind of loan or credit card, the Bank or lender gets a right to go through an applicant’s CIBIL report to determine the financial status of the consumer. This kind of query is termed as hard query & it surely reduces The CIBIL score by 5-8 points. That is why it is always advised not to put forward unnecessary loan applicants if you don’t require it, otherwise it will affect the credit report without understanding the eligibility criteria of particular loan application, and one should never put forward the loan application as rejection of loan application also hampers the CIBIL score.
2) Effect of Soft Query on Credit Score:-
It is always good to stay updated regarding your CIBIL score so whenever any individual wants to know his credit score & he gets the credit score by himself or through some official website, this query is termed as a soft query. It never affects your CIBIL in either way positively or negatively. But the best part is that keeping track of your Credit Score helps to keep check on your credit activities regularly it also helps you eliminate the wrong information which may be entered by CIBIL by mistake. Regularly checking the Credit Score helps you to check any missed EMIs or payments.
CIBIL Score is a fundamental thing that should be near to 750 so that all the Banks or lenders see you as the most reliable loan seeker.