Does Checking Your Own Credit History Hurt Your CIBIL Score?

Atoshi Kadam is a 30-something employee in a corporate establishment in Mumbai. Not only is she good at her work, but she is also careful to use her credit card responsibly. Atoshi keeps her card utilisation under 30%, makes the EMI payments on her mortgage regularly and is gearing up to apply for an auto loan. But the one thing she never does is checking her CIBIL score. She is under the impression that checking her credit report will hurt her credit score.

She is evidently not alone. A lot of people harbour wrong notions about checking their own credit scores. So here is the lowdown on why checking your CIBIL score will not have a negative impact on your credit report. On the contrary, it will be considered a healthy practice.

There are numerous factors that go into the making of your credit score and credit inquiries are, indeed, one of them. In fact, it accounts for 10% of the calculation of your score. This means the higher the number of credit inquiries in a short frame of time, the worse the impact will be on your score.

However, the inquiries that will make a difference to your CIBIL score are the ones that a lender makes when you apply for a personal loan, mortgage or an auto loan or when you are applying for a credit card. These are called hard inquiries and most lenders generate them nowadays. In other words, they will pull out your credit report to find out how responsible you are in terms of handling your debt. If you are applying for too many loans or cards in a short period of time, there will be several hard inquiries on your CIBIL report.

On the other hand, if you want to check your own CIBIL report and credit score, it will be considered a soft inquiry and will have no impact on your credit score. In fact, it is advisable that you check your CIBIL score at least once every year. That way, you will come to know whether or not you are in perfect financial health and you can also report discrepancies, if any.

Just like Atoshi, you might have been living in fear as you thought it would be detrimental to your credit score if you check it yourself. But now is the time to bust that myth. A credit bureau is as much for you to access as it is for your lender. So go ahead and check your credit score whenever you deem fit.

About the author: Rajiv Raj is the director and co-founder of www.creditvidya.com.