Can Anyone Check Your Credit Without Your Permission?

When you apply for a credit card or a loan, the card issuers/lenders check your credit profile to understand how credit-worthy you are. When it comes to a check on your credit report, you might be having several questions in your mind, such as who can check your credit report and when? Many people believe that any random person can check their credit report by having some basic information, but that is not true. Yes, your credit profile can be checked even without your permission, but not everyone can do that. The credit report of an individual is an important document and only authorized people have the right o check it. In this article, we are going to discuss all about who can check your credit profile. Continue reading the article for more information:

Who Can Check Your Credit Profile?

No random person can check your credit profile, but only a few people are authorized. When you need a credit or a loan, the respective lenders/lending organizations need to check your credit profile to understand how creditworthy or risky you are as a borrower. These lenders check your credit reports that may be prepared by any of the four major credit bureaus in India, including Transunion CIBIL, Experian, Equifax, and CRIF Highmark. A credit report is a detailed document that contains all the information about your past and current loan/credit accounts and your repayment behavior. Your credit score is calculated on the basis of this report and the card issuers/lenders further check this report before approving/rejecting your application. The following people/institutions have the right to check your credit profile if required:

• Lenders/Card Issuers Before Approving/Rejecting Your Application: When you apply for a credit card or a loan, the banks/issuers can not approve your application randomly, but they need to check your creditworthiness first. You can get approved for credit only if you have a decent credit score, otherwise, there are high chances that your application will get rejected.
• Your Current Card Issuers: Your current lenders/card issuers can also check your credit reports from time to time as they need to make sure that you still deserve the credit card that you are having. Even if you request a higher credit limit, your card issuer will check your credit score before approving your request.
• Insurance Companies: Not always, but sometimes your insurance companies can also check your credit report without your permission. This is not yet a widespread practice in India, but insurance organizations are slowly adapting the practice of checking the credit scores of their customers.
• Employers: When you apply for a job, the respective employer may also check your credit score in order to understand how responsible you are for your financial decisions. People with good credit scores create a good impact even while getting a job.

How Does a Credit Check Impact Your Credit Score?

The number of hard inquiries on your credit profile is also one of the most important factors that are considered while determining your credit score. Whenever you apply for a credit card or a loan, the issuer/lender checks your credit report, and this check on the credit report is known as a hard inquiry. The more hard inquiries there are in your credit profile, the more your credit score gets impacted in a negative way. 10% of your credit score is calculated on the basis of hard inquiries on your credit profile and hence, it is advisable not to apply for credit cards/loans very often. An individual who applies for multiple credit cards/loans within a short time period is considered a risky borrower. If you have applied for a credit card, you should wait for a few months before your next application.

However, there is another type of inquiry on your credit profile, known as a soft inquiry. Soft inquiry refers to the credit check of an individual by himself/herself. These types of inquiries don’t impact your credit score and hence, anyone can check their own credit score any number of times. In fact, it is advisable to check your own credit report regularly in order to understand where you stand and what mistakes are you making.

Read More: This Is How Your Credit Score Is Impacted By Your Credit History!

Bottom Line

Your credit report is one of the most important documents for you as well as for the card issuers/lenders when it comes to your credit profile. But, people can not randomly check anyone’s credit profile. Only certain organizations have the authority to check your credit report as mentioned above. Moreover, you should not worry about your credit score when you check your own credit report as it doesn’t get impacted by a soft inquiry. It is only when a lender/card issuer checks your credit report that your credit score gets impacted. If you have any further doubts/queries regarding any information given above, you can freely ask us in the comment section below!