29-Aug-2018 written by : FSI-Team
When you go through different articles online, the generic statement is should be checking the credit score regularly to update yourself on where you financially stand. It makes life easy, when you are hunting for a loan or a financial product. Knowing your credit score beforehand can help you in many ways which also includes negotiating on the interest rates and processing charges. As we know there are different credit bureaus in the market and every credit bureau have their own way of rating your transaction and calculating your credit score to apply on your credit report.
The credit inquiries are generally categorized into two,
When you talk about inquiries there are different set of organizations and people who can have access to your credit report.
Whenever you apply for a loan or a financial product, the bank or the non-banking financial company makes an inquiry on the report and the transaction is registered on your account. Such inquiries are called hard inquiries. A hard inquiry will hurt your score as it accumulates 10% of the credit score. This type of inquiry transactions stay on your report for a very long time and your future lender may ask you on why you were trying to get a loan in your past.
Apart from banks and lenders, your credit report can be accessed by other people like your employer, your utility provider, the landlord, etc. when these entities make a credit inquiry they are termed as soft inquiries. They do not harm your credit score, the transactions are certainly recorded on your report but this will never impact the cibil score. Soft inquiries are always initiated after your consent.
It is suggested to always be on the lower side when it comes to hard inquiries, this will not only hamper your cibil score but will also give opportunity to your future lenders to judge your credit worthiness.
You must be receiving lots of calls from various contact centers offering you various financial products and credit cards. They will woo you with offering your attractive schemes to opt for the loan or the credit card. What you do not know is that they don’t have your credit report in front of them, after you fall for their marketing gimmick they make a hard inquiry on the report and if your credit score is bad they deny you the financial product. This not only hampers your chances of a finance product but also hurts your score.
As mentioned in the earlier point, the credit score does not get affected when you yourself check the score. You can bank on this opportunity and check the score frequently to detect any mistakes made by the credit bureaus. Such mistakes can lead you to a low cibil score. This practice will not only help you keep a track on how you doing financially but will also will make you financially ready if you are considering taking a loan.
There are high chances of banks and lenders checking your cibil score without your consent. If you find such transactions, you should raise a dispute and try to rectify the transaction on your report. This will help you enhance your cibil score in no time.
If you are looking for a long time financial well being, you must maintain a good credit score. Maintaining a good cibil score is not an easy task, there is a lot of dedication involved and you will have to adhere financial integrity. With stronger credit, you can achieve financial marvels and can go for a toss if not adhered properly.