Business News Desk, Checking your credit score repeatedly reduces your CIBIL score. But is this true? Do not make the mistake of believing what you hear. There can be many reasons for a low credit score. Usually, the reason for a low CIBIL score is the delay in repaying the loan. To know whether checking the score repeatedly reduces it or not, you will first have to understand Hard Inquiry and Soft Inquiry. But, in the recent past, RBI has received many complaints regarding this. Therefore, RBI changed the rule related to this.
What is Cibil score?
Cibil score is a three-digit number that reflects your credit history and creditworthiness. This score ranges from 300 to 900, with a score of 750 or above being considered a good score.
You will get Cibil Score in 15 days
According to the new rules, now the CIBIL score of the customers will be updated every 15 days. This rule will come into effect from January 1, 2025. According to RBI, banks and financial institutions will now update the credit score quickly. This means that the CIBIL score can be updated on the 15th of every month and at the end of the month.
What happens by checking Cibil score repeatedly?
Generally, when you check your Cibil score yourself, it is called a “soft inquiry”. Soft inquiries do not affect your score. But when a bank or financial institution checks your credit score, it is called a “hard inquiry”. Hard inquiries can reduce your Cibil score by a few points.
RBI’s new rule
RBI has recently implemented some new rules, under which some changes have been made in the process of hard inquiry. Now if a bank or financial institution repeatedly checks your credit history, it can affect your score more than before. This rule is especially important for those who repeatedly apply for loans or credit cards.
These are also the reasons for falling credit score
The credit score is determined between 300 and 900. Generally, a credit score of more than 750 is considered good. The main reason for falling credit score is of course not repaying the loan within the stipulated time, but apart from this, many other factors also affect your score.
For what other reasons will CIBIL fall?
Having a bad credit utilization ratio. Applying for a loan multiple times in a short period of time. Loan settlement. Becoming a loan guarantor for a person who does not repay the loan on time. Not paying credit card dues on time, etc.
Do not apply for loans or credit cards frequently: Every application leads to a hard inquiry on your score.
Monitor your Cibil score: But for this, use the official website of Cibil or any institute recognized by RBI only.
Improve your credit history: You can improve your Cibil score by paying loan and credit card bills on time.
