Credit Enquiries and How They Impact Your Credit Prospects
Last Updated : Sept. 29, 2020, 12:11 p.m.
The need for a credit enquiry often arises when someone requires a loan or credit card. While some do a credit enquiry just to check their credit score, others take a step further and apply for a fresh credit. Once they apply, lenders will do a credit enquiry too. But how do these credit enquiries impact you? Firstly, the impact of these enquiries on your loan and credit card prospects may not be the same. The variation could be due to differences in the credit record of individuals. While some can have an excellent repayment track showing no spot of payment delays or defaults, others may have repayment issues. Accordingly, the result of credit enquiries will vary.
Considering all these, we have made it a point to define different credit enquiries and elaborate on their possible impacts on your credit prospects. Let’s read this post to know the same.
Types of Credit Enquiries
There are two types of credit enquiries – soft and hard. When you check your credit score & report on the website of credit bureaus such as CIBIL, Experian, Equifax and CRIF High Mark, it will go down as a soft credit enquiry. Even when you check the same on the website of partners of these credit bureaus, it will be called a soft enquiry. But when you apply for a loan or credit card, the lender pulls your credit report prepared by any of these bureaus. It will be called a hard enquiry.
Impact of Soft Credit Enquiries on Your Credit Prospects
Soft credit enquiries may not lead to customers applying for loans and credit cards. These enquiries don’t lead to any decrease in the score. However, one has to pay something for checking beyond a specific number of times. Yes, credit bureaus don’t allow you to check your credit score for FREE throughout on their website. You can have different subscriptions for soft enquiries. For example, CIBIL has three subscription models – Monthly, Half-yearly and Yearly – labelled as Premium, Standard and Basic. So, what do these subscription models have for you? Let’s find out!
| Features | Basic | Standard | Premium |
|---|---|---|---|
| Cost | INR 500 | INR 800 | INR 1,200 |
| Unlimited Access | 1 Month | 6 Months | 1 Year |
| Alerts | Not Available | Available | Available |
| Score Simulator | Available | Available | Available |
| Credit Monitoring Services | Available | Available | Available |
| Loan Offers | Available | Available | Available |
Let’s understand these features one after another.
Unlimited Access – With this feature on, you get daily updates to your CIBIL score and report.
Alerts – This feature will let you know the changes to your credit profile whenever it happens.
Score Simulator – This will tell you about the change in your credit score based on future credit actions.
Credit Monitoring Services – It is like a comprehensive credit advisory for you. You can improve your credit health by taking note of the personal credit score analysis, credit summary and checking the changes in the score
Loan Offers – Based on your credit score, you will have certain credit deals that you can see and apply for.
How to Subscribe and Get These Services from CIBIL?
To get any of the subscription models, you need to create an account on CIBIL. Here are the steps for the same.
- Go to the official website of CIBIL
- Click on Get Your CIBIL Score
- Click on the subscription model you want
- A new page will appear asking you to mention your email address (which will be your username) and create a password
- Mention your name, ID Type and ID Number, Date of Birth, Pincode and Mobile Number
- Read the terms and conditions carefully before clicking on the ACCEPT and CONTINUE button
- The next step will require verifying your identity, followed by the payment
This is how you can subscribe to different credit score pricing at CIBIL.
What If We Tell You Can Make as Many Credit Enquiries You Want Without any Charge?
Yes, you can do so at Wishfin, a premier financial marketplace and an official partner of CIBIL. Check out the steps below to know how you can make credit enquiries at Wishfin for FREE.
- Visit www.wishfin.com
- Click on CIBIL Score
- Mention your name, date of birth, gender, PAN Number, email address and mobile number
- Tick on the checkbox containing terms and conditions
- Click on ‘Submit’
Your details will be processed for authentication. Once authenticated successfully, you can log in to check your CIBIL score. Here are the steps for login.
- Click on ‘ LOGIN ’
- Mention your email address or mobile number
- Enter the One-time Password (OTP) and log in
How Does a Hard Credit Enquiry Impact Your Credit Prospects?
The impact of hard credit enquiry on credit prospects can vary from one individual to another depending on their credit record. Someone having a good credit score of say 750 and above will not have problems in getting the loan sanctioned from the lender. If your score is low, you must have had some repayment issues. And, if you apply for a fresh credit without sorting out these issues, the lender will do a hard enquiry, which could result in a rejection. As a result, the credit score will dip further.
Individuals who are facing this problem should check their credit report thoroughly. We have already discussed above how you can check the score and report in a few simple steps. Take note of that and check. Start paying the existing loan or credit card dues on time. Be patient, the score won’t improve at a fast clip. It will take time. So, apply for a loan (especially unsecured loans such as personal loans) when your credit score is good.
Can Frequent Hard Credit Enquiries Lead to Loan or Credit Card Rejections?
You may have heard that frequent credit enquiries can lead to the rejection of loan or credit card applications. But that may not hold true in every case. If your repayment track is smooth and the credit utilization ratio remains optimum, there might not be any rejection provided your income is sufficient. When you apply for a new loan, the lender likes to see the proposed EMI and other obligations do not constitute more than 50-60% of the net monthly income. If that remains the case with you, the lender could accept your loan application easily.
How to Remove Unauthorized Hard Credit Enquiries from Your Credit Report?
Hard credit enquiries stay in your credit report for as long as 2 years. But if you have not applied for a loan or credit card, the hard credit enquiries shown in your report could be the result of identity theft. You can dispute the same on the website of the credit bureau. All you need to do is fill the online dispute form and mention the type of dispute. The bureau will reply within 30 days of the submission of the dispute form. You will get a fresh credit report with the hard credit enquiries getting removed from the same.