Image Source : PIXABAY It is good to keep a tap on your credit score.
Credit score is an important part of everyone’s financial journey. It is a three-digit number that can be helpful when applying for a credit card or loan. There are four main credit bureaus in India – Credit Information Bureau (India) Limited (CIBIL), Equifax, Experian and CRIF Highmark. However, CIBIL is the most prominent among them.
What is a good CIBIL score?
Anything above 750 is considered to be an excellent CIBIL score while one in the range of 650-749 is considered to be good. A score in the range of 500-649 is considered average and below 499 is poor.
Does checking your credit score impact your score?
It is good to keep a tap on your credit score. But will it harm your score?
There are several misconceptions around this topic as every time your credit score is checked, it is reported in your credit information report.
However, it is important to understand that these enquiries have been classified into two types – Soft credit check and hard credit check.
What is a soft check?
– When you check your own credit score (CIBIL score)
– When your employer or landlord checks your credit with your permission
How often you can check your credit score?
As soft check doesn’t impact your credit score, you can check it as often as you like. In fact, checking your credit score regularly can be a good habit because it help you understand your eligibility before applying for any loan or credit card.
What is a hard check
A hard check or inquiry is when lenders and credit card companies check your CIBIL score before approving loans and credit cards.
These kinds of inquiries can temporarily lower a customer’s CIBIL score by a few points.
Clearing dues won’t improve credit scores immediately
It is important to know that when you clear your dues, it will take some time before the credit information companies will update the score. This may take around 15 days, which earlier used to be one month.
