Hard Inquiry vs Soft Inquiry Explained: Will it affect Credit Score?

A lot of people are confused about CIBIL Inquiries. In today’s post, I will try to explain in detail about Hard Inquiry and Soft Inquiry, and how it affects your CIBIL Score.

What is a CIBIL Inquiry?

The actual term is ‘Credit Inquiry’, however since CIBIL is the most popular Credit Bureau in India, ‘CIBIL’ replaced the word ‘Credit’. We say ‘CIBIL Score’ instead of ‘Credit Score’, and so is ‘CIBIL Inquiry’.

Al Credit Bureaus maintain our Credit Profile, and whenever that information is accessed, we can say that an Inquiry is made. Now, depending on how this inquiry is made, and who makes this, it is categorized into Hard Inquiry and Soft Inquiry.

What is a Hard Inquiry?

When you apply for a new Loan or Credit Card, your lender can fetch your credit history from credit bureaus. In most cases, this is a hard inquiry.

A hard inquiry is basically keeping a ‘record’ of the credit inquiry on the CIBIL itself. In simpler words, this is like telling other lenders (who fetch your credit reports in the future) that you have applied for a loan/credit card on this date earlier.

A hard inquiry affects your CIBIL Score. Although there is no magic number, you should never have a lot of hard inquiries on your Credit Profile in a short span of time. This sends a signal to your future lender that this person has obtained a lot of loans or credit cards recently and is a risky person to offer further credit.

Read: Factors that Affect your Credit Score Positively/Negatively

What is a Soft Inquiry?

A soft inquiry can be done in any of the instances when you do not apply for a loan or credit card yourself. The best example can be when your bank or financial institution decides to offer you pre-approved loans and pre-approved credit cards. Banks check your credit report internally and offer you a limit depending on your credit behavior. But it does not impact your credit score at all.

Another example of soft inquiry is when you are checking your credit score via any 3rd Party Apps. Basically what happens is that you are giving your consent to the 3rd Party App to fetch your Credit Profile on your behalf. This is also a soft inquiry and your Credit Score is not affected.

Q: Will my Credit Score go down if I check my Credit Score myself?

Ans: No. Whether you check your credit score yourself, or via any 3rd party credit score checking apps, your credit score won’t be impacted, since it will be a soft inquiry only.

You can check your Credit Score as many times as you want. In fact, it is recommended that you regularly keep checking your credit scores to identify any mistakes in reporting and rectify them properly. It’s your profile, after all.

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