Credit management is a big responsibility. The way you handle your EMIs and credit cards can directly affect your loan approval prospects in future. To ensure you are on the right track it is important that you keep a check on your credit score on a timely basis.
There are various ways you can get a credit score such as-
- Your Bank- Some banks and even loaning companies do provide CIBIL score to their customers on a monthly basis. You can either check your score by logging in your account on their website or they may provide you the same on your monthly statements.
- Credit Score Service Providers- Owing to the significance of credit score today many websites have emerged on the web that provide free CIBIL check online While some of these websites only provide you a rough estimate of your exact score by analyzing your credit history and payment patterns some of them do actually provide the exact score.
- The Authority- There are different credit bureaus in India that can be approached for your credit score. These are CRIF High Mark Credit Information Services Pvt. Ltd. , Experian Credit Information Co. of India Pvt. Ltd, Equifax Credit Information Services Pvt. Ltd, and Credit Information Bureau India Limited. Out of these four 4 CIBIL is the most widely accepted one. Majority of banks are associated with CIBIL only and so if you want your credit report you can fill out a form on CIBIL website and pay a nominal fee. You will receive your detailed report along with the score.
There are many things that can hurt your credit score and inquires made on the same is one of them. Basically there are two types of inquiries- soft enquiry and hard enquiry. While the former doesn’t affect your credit score in any way the latter does so slightly.
Soft Enquiry- A soft enquiry is the one that is made by you. For instance, if you just want to check your score then you can get your report from CIBIL. This will be a type of soft enquiry. You can get your report any number of times you want but your score will never be affected.
Hard Enquiry- Hard enquiries are made by your lenders or banks when they have to make a lending decision. For instance, when you need a credit card then your bank will first make an enquiry to CIBIL to see if you have a decent CIBIL score. Only if they are satisfied with your report and score you will get your credit card. The problem with hard enquiry is that if your loan or credit card applications are rejected multiple times then your score will be damaged even though you are not obtaining what you seek(credit card or loan). Thus, credit management experts always recommend that you only apply for loans when you have a good score first.
Enquiries on your credit score should always be made with caution. Too many hard enquiries on your report could cause a lot of damage and make things even worse. If your bank doesn’t provide credit score to its customers it is best that you get your copy of report from CIBIL itself. You can also look for websites that offer the same. Just make sure that they don’t make a hard enquiry as that would be counter-productive.
How to Avoid Hard Enquiries?
If you are going to apply for a loan or a credit card you can’t dodge a hard enquiry. However, you can minimize the damage by apply for loans around the same time. For instance, if you are comparing different loans available in the market then it is better if you apply for them simultaneously. Chances are that CIBIL will recognize the pattern and understand that you are only trying to get the best deal possible. This should minimize the damage to your score. However, if possible you should apply for loans only when you feel your score is high enough to get an approval.