A common question that often pops up in credit score conversations is "Does checking my credit score lower it?" It is not uncommon for many people to wonder if accessing their credit score frequently might have adverse effects on their financial health. The idea of something as simple as checking one's credit score having a negative impact might sound peculiar, but it is a myth that continues to persist. In this article, we will debunk this notion, explain the difference between soft and hard credit inquiries, and explore how you can leverage the Bajaj Finserv Credit Pass to build and maintain a stellar credit score.
Understanding the credit score basics
First things first, let us get acquainted with what a credit score is and how it works. Your credit score, commonly referred to as the CIBIL Score in India, is a numerical representation of your creditworthiness. It ranges between 300 to 900, with a higher score (750+) indicating better creditworthiness and an increased likelihood of loan approvals at favourable terms.
Understanding soft and hard credit inquiries
Now, let us distinguish between soft and hard credit inquiries. A soft inquiry occurs when you check your own credit score. The good news is that soft inquiries do not affect your credit score in any way. They are merely informational and will not be visible to lenders when they review your credit history.
On the other hand, a hard inquiry is conducted when you apply for credit, such as a loan or credit card. Lenders perform hard inquiries to assess your creditworthiness and potential risk as a borrower. While a single hard inquiry may have a negligible impact on your credit score, multiple inquiries within a short span could have a negative effect.
Monitoring your credit score
Now that we have clarified the distinction between soft and hard inquiries, the importance of monitoring your credit score cannot be overstated. Regularly keeping an eye on your credit score allows you to track your financial health, identify areas for improvement, and ensure accuracy in your credit report. Detecting signs of identity theft or fraudulent activities early on is easy with regular monitoring of your CIBIL Score. You can prevent potential damage to your credit standing by disputing the discrepancy with the credit bureau and getting it rectified.
Tools like Bajaj Finserv Credit Pass provide a convenient and user-friendly platform to check your credit score frequently without any detrimental effects. Besides providing monthly credit score checks, the Credit Pass offers valuable real-time insights into your credit health and interactive tools to enhance your creditworthiness. By leveraging this information, you can adopt responsible financial habits and demonstrate your creditworthiness to potential lenders.
Rest assured, checking your credit score through soft inquiries does not harm your credit score in any way. In fact, it is an important practice that aids in maintaining a healthy financial profile. Remember that responsible credit management is crucial for achieving your financial goals, whether it is buying a dream home or starting a business.
