With how easy it is to check your credit score online, maintaining a healthy profile is much easier. In just a few clicks, you can know your CIBIL score information without harming your score. However, certain financial undertakings do impact your score negatively. For instance, defaulting on payments will cause a noticeable dip in your score, which is common knowledge. Similarly, making too many new applications is also problematic, causing your score to decrease.
While it is important to know the factors that can harm your score, it is equally important to know about those that do not affect your profile. This can also save you from unnecessary worry about little things that may not even matter when it comes to your credit score. For more insight on this subject to help you prioritise your credit health, read on.
Credit score enquiries made by you
Contrary to the popular misunderstanding, you can check your credit score online
as many times as you want and it will have no negative impact on your score. Such checks are known as soft inquiries. In fact, it is recommended that you regularly check your credit score online. This can keep you updated about how your credit score gets impacted by your financial decisions. Another reason why you should check your credit score online is so that you can notice dips and assess your profile for discrepancies. Unwarranted changes in your score are a great sign that there is an issue.
The inquiries that do affect your credit score are the ones made by financial institutions. Whenever you apply for credit, the lender will access your credit score and report to assess your profile. This type of inquiry is known as a hard inquiry and it appears on your credit report as well.
Having a low or a dip in monthly income
Credit rating agencies do not consider your income as a factor for your credit score. This is why a dip in your income or simply having a low income will not affect your credit score negatively. Your income is important while assessing your request for new credit. Lenders take your debt-to-income ratio into consideration to assess your ability to service debt. The only time it can affect your credit score is if you fail to make a payment or make a delayed payment due to lack of funds. So, your credit score will not be affected as long as you manage your credit responsibly.
Payment of utility bills
Not all bills affect your credit score. Utility bills like phone or electricity bills are not credit payments and therefore do not affect your credit score. Moreover, your payment or delay in payment of insurance or investment does not affect your score. You can notice this when you check your credit score online and generate a credit report. Only after consistent credit payments will you see a change in your score.
Rejected credit application
Many people believe that a rejected credit application can hurt your score. However, it is not the rejection that affects your score, but rather it is the application. When you apply for new credit, lenders incite a hard inquiry and this gets reflected on your profile for a short period of time. Naturally, multiple applications will cause a noticeable dip in your score, especially if you get rejected by various lenders. An easy way to avoid this problem is to check your credit score online before you apply. If you meet the CIBIL score requirements, you are likely to get approved and won’t need to apply more than once.
With a better understanding of the factors that impact your Credit score
, you can now check your credit score online without any doubts. Although it is ideal to have a credit score of 700 and above, you should not wait to take action until after your score goes below 700. Instead, work on improving your score constantly. An easy way to track your CIBIL score is to check your credit score online on Bajaj Finserv. As this service is free, check CIBIL score often and especially before applying for new loans. Besides the credit score checking service, Bajaj Finserv also offers you a personalised Credit Health Report.