Does your Credit Score Get Impacted if you Enquire About it


By Anupama Deshpande | Mar 03, 2023

As we know that the credit score is a three-digit number representing the creditworthiness of the loan applicant. It's an important factor that lenders consider when deciding whether to approve your credit application or not.

In India, your credit score is a critical factor in determining your eligibility for loans and credit cards. It is a three-digit number that ranges from 300 to 900, and it is calculated based on various factors such as your credit history, payment history, credit utilization, and length of credit history. Many people wonder if checking their credit score can have a negative impact on it, and the answer is both yes and no. In this article, we'll explore whether your credit score gets impacted if you enquire about it.

Firstly, it's important to note that there are two types of credit inquiries - hard inquiries and soft inquiries. In a hard inquiry, your credit report is checked by the lender in order to make decision whether you are eligible for the loan for which you have applied. This kind of inquiry may have an impact on your credit score. On the other hand, a soft inquiry is when you check your own credit report or when a lender checks your credit report for pre-approval purposes. This type of inquiry does not impact your credit score.

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Soft Inquiry vs Hard Inquiry

Before discussing the impact of credit score inquiries, it is important to understand the difference between a soft inquiry and a hard inquiry. A soft inquiry, also known as a soft pull, is when you check your own credit score or when a lender checks your score for pre-approval purposes. A soft inquiry does not have any impact on your credit score, and it does not show up on your credit report.

A hard inquiry, on the other hand, occurs when a lender checks your credit score as part of a loan or credit card application. A hard inquiry can lower your credit score by a few points, and it can stay on your credit report for up to two years.

Impact of Hard Inquiries

When you apply for a loan or credit card, the lender will typically check your credit score to assess your creditworthiness. This check is known as a hard inquiry, and it can have a negative impact on your credit score.

Each hard inquiry can lower your credit score by a few points, but the impact is usually small and temporary. The exact impact of a hard inquiry on your credit score depends on various factors such as the number of inquiries, the type of credit you are applying for, and your credit history.

If you have a good credit score, a single hard inquiry may not have a significant impact on your credit score. However, if you have a low credit score or if you have multiple hard inquiries within a short period, it can lower your credit score significantly.

Impact of Soft Inquiries

Soft inquiries, such as checking your own credit score, do not have any impact on your credit score. You can check your credit score as many times as you want without worrying about any negative impact on your credit score.

In fact, checking your own credit score can be beneficial as it allows you to monitor your credit score and detect any errors or fraudulent activity on your credit report. By regularly checking your credit score, you can take steps to improve it and maintain a good credit standing.

Conclusion

In conclusion, In conclusion, checking your own credit score through a soft inquiry will not impact your credit score. However, if you apply for credit and a lender checks your credit report through a hard inquiry, it can impact your credit score. It's important to monitor your credit report regularly and be aware of the impact of hard inquiries on your credit score. By being responsible with your credit and limiting your credit applications, you can maintain a good credit score and improve your chances of getting approved for credit in the future.

However, checking your own credit score in India does not have any negative impact on your credit score. Soft inquiries, such as checking your own credit score, do not show up on your credit report and do not lower your credit score. While applying for loans or credit cards can result in hard inquiries, which can lower your credit score temporarily. If you have a good credit score, a single hard inquiry may not have a significant impact on your credit score. But if you have a low credit score or multiple hard inquiries within a short period, it can significantly lower your credit score.

Therefore, it is important to be mindful of how often you apply for credit and to only apply for credit when you really need it. By doing so, you can maintain a good credit score and improve your chances of getting approved for loans and credit cards with favorable terms and conditions.

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About Anupama Deshpande
Anupama is a Co-Founder of CodeForBanks.com. She is an MBA (Finance) and Chartered Financial Analyst (CFA). She also carries a Fellowship degree in Life Insurance Sector and is a Master of Computer Application (MCA). She is an expert in Finance Field with an experience of over 18 years on different managerial positions in finance industry including Stock Market, Depository and Mutual Fund Sectors. Apart from that she has remained for few years in the field of marketing as well. Her suggestions and advice for investments have been very useful to many people.
Her vast interest & expertise in the field of finance have encouraged her to write the articles so that others can also get benefitted out of them. She never loses any opportunity to learn and be creative. She is a valuable asset for CodeForBanks.com & important resource to all those around her.