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Getting Free Credit Report Will Hurt My Score?

09-Feb-2018 written by : FSI-Team

Getting Free Credit Report Will Hurt My Score?

In today's world maintaining finance is everything. If you have a good financial status, you are at ease in terms of financial stability and financial harmony. You get all the recognitions in society for being a responsible person who maintains his finances very well. There are ways to evaluate how you are doing in terms of finance. For example, the number of assets you hold, how much is your liability, cash in hand, cash in the bank and also your credit score. Just like assets and liabilities giving you an insight on how you are doing financially, a credit score gives a representation on how you manage your funds.

What is a credit score?

A credit score is a numerical representation on how you are doing financially to the outer world. It's a way one can verify on how your financial management is. For example, if a landlord wants to check if you pay all your rent on time, he/she won't be asking for you balance sheet or your bank statement. They can simply get your credit report to understand if you make all your payments on time and then make a decision to lend you their property. A bank will get your credit report and decide if you are credit worthy and whether they can give you a line of credit. A credit score ranges from 300 to 850, where 300 being a bad credit score and 850 being excellent. There are a lot of options online from where you can get a free credit report. The place where your credit score is stored is called credit bureau, there are number of credit bureaus available and each bureau has their own protocols to evaluate the score.

The score is usually calculated on the same factors;

  • Payment History
  • Types of credit
  • Amounts owed/credit utilization
  • Length of credit history
  • Credit inquiries

The last category is what we will be focusing here,

Credit inquiries

Every time if you or someone checks the credit report it is termed as a credit inquiry. If you are applying for a loan in bank, the bank will conduct a background verification on you which will also include your cibil score that in the end will result to a credit inquiry.

Who all can get access to my credit report?

There are a lot of people and companies who can get access to your cibil score. Every individual or entities have their own set of reasons why they want to check your cibil score. These credit inquiries are categorized into two sections, soft inquiry and hard inquiry.

Soft inquiry Vs. Hard inquiry

Soft Inquiry

Soft inquiries includes your own requests for credit report, if a landlord requests for access of your cibil score, an insurance company to determine your premium and also your current employer to understand your spending patterns before assigning a task or giving you a job. These soft inquiries stay on your report from 12 to 24 months and do not hamper your credit score. You can also give someone rights to check your score if they do not come under the umbrella to view your credit report.

Hard inquiry

A hard inquiry happens when you apply for a loan or a new line of credit and the lender pulls up your report to understand your credit worthiness. These inquiries stay on your report for at least 24 months and hamper your cibil score. If you happen to apply for a lot of credit lines at once, you will hamper your credit score to a very large extent. In such cases it becomes hard to improve cibil score any soon.

Now that you know, checking the report on your own does not hurt your cibil score, it is advisable to check your report every once in a year. This will help you understand what your score is and where you stand in terms of credit worthiness. It can also save you from any fraudulent actions like identity theft etc.


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