CIBIL Score & RBI's New Rule: Does Frequent Checking Really Hurt Your Credit Score? Find Out Now!

In today’s world, having a strong credit score is just as important as having money in your bank account. Whether you're applying for a home loan, car loan, education loan, or a credit card, the first thing lenders check is your CIBIL Score. It's like your financial report card.

But here’s a common fear:
“If I check my CIBIL score too often, will it go down?”
Recently, the Reserve Bank of India (RBI) updated some rules regarding credit scores and how they are handled. If you're someone who often checks their score, or applies for credit frequently, this article will help you understand exactly how these changes impact you.

Let’s break it all down.

🔍 What is a CIBIL Score?

A CIBIL Score is a 3-digit number between 300 and 900 that reflects your credit history and repayment behaviour. It’s calculated by TransUnion CIBIL, one of India’s leading credit bureaus.

A score of 750 or above is considered excellent.
The closer your score is to 900, the more trustworthy you appear to lenders.

Why Does It Matter?

Because it directly affects:

Whether your loan or credit card application will be approved
What interest rate you’ll be offered
How much loan amount you can qualify for

📅 RBI’s Latest Rule: What Has Changed?

Earlier, banks and financial institutions were required to update your CIBIL score just once a month. Now, according to the new rule that came into effect on January 1, 2025, your CIBIL score will be updated twice every month.

⏰ Update Schedule:

On the 15th of each month
At the end of each month

🔄 What Does This Mean for You?

Faster updates mean:

Any improvement in your repayment (like clearing dues or closing a loan) will reflect sooner.
You can track your credit health more accurately and in real time.
Errors in credit reporting can be corrected more quickly.

❓ Does Checking My CIBIL Score Frequently Lower It?

This is where the confusion starts. Let's clarify:

✅ No, if YOU are checking it (Soft Inquiry)

When you personally check your credit score using:

The CIBIL website
An RBI-authorized app or portal
…it is called a Soft Inquiry, and it does NOT affect your credit score at all.

In fact, you should check it regularly to track your progress and catch any errors.

❌ Yes, if LENDERS are checking it often (Hard Inquiry)

Whenever you apply for:

A personal loan
A car loan
A new credit card

…the bank or NBFC (non-banking financial company) checks your credit report. This is a Hard Inquiry.

💡 Hard inquiries DO impact your credit score—especially if there are many within a short period of time. It signals to lenders that you may be desperate for credit or struggling financially.

🔁 RBI’s New Rule on Hard Inquiries

RBI has now placed more focus on regulating hard inquiries.

What’s New?

If multiple banks/lenders check your credit report frequently, your score may drop faster than before.
This is especially true if you're applying for several loans or credit cards at the same time.

Who Will Be Affected Most?

People who apply often but get rejected
Those who compare offers from many banks without understanding the impact
Individuals with already low credit scores, trying for multiple credit products

📉 What Other Actions Can Hurt Your Credit Score?

While hard inquiries are a factor, here are other key reasons your credit score may fall:

1. Late or Missed Payments

Skipping or delaying EMI or credit card bills is a major red flag.

2. High Credit Utilization

Using more than 30% of your credit card limit can hurt your score.

3. Too Many Loans

Having multiple ongoing loans reduces your creditworthiness.

4. Loan Settlement

If you settle a loan instead of paying in full, it reflects poor repayment behaviour.

5. Being a Guarantor for a Defaulter

If someone defaults on a loan where you are the guarantor, your score will take a hit.

✅ How to Maintain or Improve Your CIBIL Score

Here’s a practical guide:

1. Always Pay On Time

Set auto-payment reminders or use standing instructions.

2. Use Credit Responsibly

Keep your credit utilization below 30% of your total limit.

3. Avoid Multiple Credit Applications

Space out your applications and do your research before applying.

4. Check Your Credit Report Regularly

Look for errors or fraud and raise disputes early.

5. Close Old Loans Properly

Once paid off, request for a ‘No Dues Certificate’ and confirm the closure is reported.

6. Don’t Settle Loans

Lenders report settlements, and it signals incomplete repayment.

🧠 Should You Be Afraid to Check Your Score Often?

Absolutely not.

In fact, it's a healthy financial habit to check your credit score every month—just ensure you're checking it yourself and not through repeated loan applications.

Use official websites like:

www.cibil.com
RBI-authorized apps like Paisabazaar, BankBazaar, etc.

These platforms allow soft inquiries only, so your score remains safe.

📌 Quick Facts You Should Know

Item	Fact
Free CIBIL Score Check	Once a year (mandatory)
Soft Inquiry	Done by you, no impact
Hard Inquiry	Done by lenders, affects score
Score Update	Now twice a month
Score Range	300 to 900
Ideal Score	750 and above

🧾 Real-Life Example

Let’s take the case of Rahul, who applied for a credit card at 4 different banks within a week. Each bank checked his credit report. Even though he had a score of 760 earlier, after these 4 hard inquiries, his score dropped to 730.

He didn’t default or miss payments—but the multiple applications made him look risky.

Lesson: Don't apply everywhere. Compare first, then choose the best option.

🎯 Conclusion: What Should You Do Now?

The RBI's new rules are designed to protect consumers and bring more transparency into how credit scores are used and updated.

Here's What You Should Do:

✅ Check your CIBIL score monthly
✅ Pay bills and EMIs on time
✅ Avoid multiple credit applications at once
✅ Use your credit card wisely
✅ Dispute any errors on your report quickly

💬 Final Thought

Your CIBIL score is your financial fingerprint—take care of it.
RBI has made the process of tracking and improving it easier than ever.
So don’t fear checking your score—just be smart about how and when you apply for credit.