When applying for a personal loan, credit card or any sort of credit in India, one of the most common topics that are discussed is the CIBIL score. Your CIBIL score — a three-digit number between 300 and 900 — indicates your creditworthiness and is an important factor in whether you will be granted loans, what your interest rates and credit limits will be.

However, have you ever wondered that your credit score can get affected by the type of the inquiry made by the lenders while processing your bureau score. Understanding the difference is critical to effectively manage your credit scores and will increase your chances of being approved for a loan without needlessly damaging your credit profile.

Here, in this detailed guide, which explains the key difference between a soft and a hard credit check, the impact of each the check on your CIBIL rating, their correct  application, and how to take good care of your credit score in the need of taking loans 

What Is a Credit Check?

A credit check is a process wherein the lenders or financial institutions check your credit report from the credit bureaus like CIBIL, Experian, Equifax, or CRIF High Mark. The report contains:

Personal details

• Loan and credit card history
• Outstanding balances
• Repayment patterns
• Defaults, if any
• Credit inquiries

Credit checks are used by the lenders to assess your ability and willingness to repay the loans or credit.

There are two general types of credit checks:

• Soft Credit Checks
• Hard Credit Checks

Each has different purposes as well as different impacts on your credit score.

What Is a Soft Credit Check?

A soft credit check or soft inquiry is when a credit report is checked and it does not modify your CIBIL score.

Important Features of Soft Credit Check:

• No Impact on CIBIL score: Your score doesn’t get affected.
• Can be Done even when not looking for a loan: This is commonly carried out as pre-approvals, or background checks.
• To you, For you only : Soft checks are not observable by other lenders.
• Consent may or may not be needed: The fact that your employer gave you a balloon to sign, your bank to sign up for pre-approved offers or even that you cheque your own credit report, are examples where consent may or may not be required.

A few examples of SOFT Credit Checks are:

• Checking your score for yourself:
  • Enquired online by requesting your credit report via digital applications.
  • Since this is a soft enquiry hence will not impact on your score.

• Pre-approved credit offers:
  • Banks may check your credit in order to offer you credit cards or loans.
  • No effect on your score.

• Background Checks for Employment:
  • Some companies check past credit history in order to ensure financial reliability.
  • No effect on your score.

• Insurance or rental applications:
  • Insurance companies or landlords may do soft checks.

Advantages of Soft Credit Checks:

• Safe to perform frequently
• Helps manage and check out your credit status.
• No Negative Impact on Loan Approval Chances

What Is a Hard Credit Check?

A Hard credit check ,also known as hard inquiry , happens when a lender check your credit report for making a lending decision.

Key Features of Hard Credit Check

• Affects CIBIL score: Multiple hard enquiries within a short period of time can affect your score by a little margin.
• Needs your consent: Lenders are required to get permission to access to your credit report.
• Other lenders can see hard inquiries on your credit report.
• Used for Credit evaluation: Helps lenders at evaluating the risk before approving the loans or credit cards.

A few examples of SOFT Credit Checks are:

• Applying for a personal loan
• Applying for the home loan or car loan
• Placing an order for a new credit card.
• Asking the current card to increase its credit limit.

The Effect Credit Soft Check and Hard credit Check on your CIBIL Score.

• Soft Checks and its Impact on CIBIL Score
  • A Soft Check won’t  affect your score .
  • It’s a perfect way to keep an eye on your credit health without worrying about destroying the credit rating.
  • Examples: Checking for your own credit score online via digital platforms like CreditMitra..

• Hard Checks and CIBIL Score
  • A Hard Score  will affect your score .
  • This effect is usually temporary but multiple hard checks in a short span of time can high credit risk to lenders.
  • Examples: When someone applies for  several loans or credit cards simultaeously.

Key Insight: 

A single hard check or two to verify legitimate loan applications has little effect, although hard checks in quick succession can reduce the odds of getting approved, as well as raise interest rates.

Soft vs Hard Checks Personal Loans.

While applying for personal loans:

Feature	Soft Credit Check	Hard Credit Check
Purpose	Pre-approval, credit monitoring	Loan approval
Impact on CIBIL	None	Minor dip possible
Visibility to lenders	Only you	Visible to lenders
Consent required	Sometimes	Always
Frequency	Can check anytime	Limit multiple checks in short period
Example	Bank offers a pre-approved personal loan	You apply for a personal loan online

Scenario

Imagine that you need a personal loan of say INR 5 lakhs:

Bank 1 is operated a soft credit enquiry and  you are shown pre-approval offers. No score impact.

Application is done with an app or NBFC and a Hard credit enquiry is made. Your CIBIL score may fall a little but facilitates in getting a loan.

You may think how many hard enquiries are too many enquiries?

• One hard inquiry can  have  an impact of 5-10 points from your score which can be reversed over time with a good re-payment track record.
• Multiple inquiries (3-5 or more) over the period of 30-45 days could indicate high credit risk.

• Credit bureaus usually count several inquiries within 30-45 days as one inquiry as far as home or auto loans are concerned.
• For small amounts loans or credit cards, each application may make a minor difference on a credit score in an individual manner.

NOTE: Always avoid attempting to apply for a number of loans/cards simultaneously.

How to Keep a Healthy CIBIL Score while applying for a credit.

1. Check your Credit Score First (Soft Check)
   1. Use the report to check your active loans or cards before any applications.
   2. Use this insight to apply to lenders who are more  likely to approve your loan.
2.  Space Out Loan Applications:
   1. Avoid several loan applications within a short period of time.
   2. Before proceeding to another lender, wait for their final decision..

3. Choose Pre-Approved Loans:
   1. Banks and NBFCs give out pre-approved loans on soft credit checks.
   2. This keeps unnecessary hard inquiries to a minimum.

4. Ensure Correct Loan Amount:
   1. Applying for loans more than you can afford can mean more rejection and multiple hard checks.

5.  Keep Current Credits in Good Standing.
   1. Timely EMIs and low credit utilisation increases the chances of approval and therefore minimise repeated applications.
6. Check Your Credit on a Frequent basis:
   1. Use soft checks  to monitor trends in score and identify errors in score.

Soft Credit Cheque Safe for Credit Health

• Checking your score/pre-approved offers through soft checks are highly recommended.
• It helps one to strategize loan applications so as to keep the hard inquiries to a minimum.

Example:

 You use soft CIBIL check to check your  score to find out before applying for a personal loan . You realise your score is 720 — excellent. You then select the best lender and apply once only triggering one hard check.

Hard Credit Cheques Are Necessary – but Should Be Managed

• Hard Enquiries, cannot be avoided if you are applying for :
  • Personal loans
  • Home loans
  • Credit card applications

Best Practices to be followed are:

• Apply selectively
• Use pre-approval offers
• Avoid multiple applications in banks at the same time

Keep in mind that it is not unusual to have one or two hard checks when checking on genuine loans. The fall in score is Temporary and it normally bounce back with a good repayment track record.

Digital Lending Platforms/ Credit Check 2025 Trends.

With digital-first apps such as CreditMitra, borrowers get to benefit from:

• Whether the eligibility is checked softly before applying or not
• Open-interest rates and EMI payables.
• Fast Loan Approval in verified CIBIL scores
• Integration with NBFCs who provide instant personal loans

Digital lending allows keeping hard inquiries to a minimum and saves your credit as you consider different lending options available.

Frequently asked questions: Soft and hard credit checks:

Q1: Does causing soft checks your CIBIL score?

No, is it fresh checks that do not impact on your score.

Q2: How Long do Hard Inquiries Remain on Credit Report?

Normally 12 months; they can have a short term effect to your score that lasts up to 6-12 months.

Q3: Am I considered to be checking my own CIBIL report, which is hard?

No, credit on yourself is a light investigation.

Q4: Does being subject to multiple hard checks mean that I will be less eligible to get a loan?

Yes, multiple inquiries are an indication of high credit risk to lenders.

Q5: What do I do in order to overcome hard inquiry impact?

Timely EMI payments and low credit utilisation help you to restore your score within a few months.

Final Thoughts

Understanding the difference between a soft credit check and hard credit check is very crucial for managing your credit responsibly.

• A Soft check is Safe, does not affect your score, is ideal for pre-approvals and credit monitoring.
• Hard checks are necessary for loan approvals but should be applied judiciously to avoid unnecessary score drops.
  

Tips for Borrowers, which should be kept in mind:

1. Soft credit check should be the first step towards an application for a loan.
2. One should be very  selective before they apply for a  loan or cards so that they cab  limit their  hard inquiries on credit reports.
3. Should use and apply for a pre-approved offers from digital apps like CreditMitra to reduce risk.
4. Ensure all EMIs and credit obligations are repaid on time.
5. Monitor your credit regularly to check for any errors or frauds.

With these strategies, you can protect your CIBIL score, improve your loan approval chances, and make informed financial decisions in 2025 and beyond.