What is a credit check?

A credit check is when a lender reviews your credit history to understand your repayment behaviour before deciding on your loan or credit card. In simple words, it’s like a background check for your finances. It tells them how trustworthy you are with borrowed money.

Now, not every credit check is the same. Want to know why? Because there are two main kinds:

• Soft Credit Check: Done when you check your own CIBIL™ score or when a lender pre-qualifies you. This doesn’t harm your score.
• Hard Credit Check: Happens when you officially apply for a loan or card. Too many of these in a short time can lower your score.

So, a credit check isn’t something to be worried about, it’s just a normal part of borrowing.

But here’s a tip: check your own credit report regularly. It will help you being a step ahead when taking a loan.