ATM :: Job Search In Financial Institutions May Lower Your CIBIL Credit Score

RAJIV RAJ | APR 8, 2014, 01.19 PM | Business Insider


Getting a job in leading banks or financial institutions is the dream of many job aspirants. But the current practice of credit checking may impact their CIBIL credit scores. Let us have a look at what happens in such cases.

When Mumbai-based Angad Gupta got his MBA degree from a leading B-school, he did not expect that his aim to get into a leading bank could end up in lowering his credit score.

“I applied to a dozen companies – all of them are leading banks and NBFCs in India,” said Gupta. “But when I pulled my personalised credit score a couple of years later for taking a car loan, I was in shock. Four of the 12 companies I had applied to, had created a ‘hard’ inquiry against my credit file, which pulled down my credit score,” he added.

There are two kinds of inquiries in credit score parlance – soft inquiry and hard inquiry. A hard inquiry always impacts your credit score while a soft one does not do so. In a hard inquiry, the credit score is being pulled when a person wants to apply for credit card, loan, etc. But a soft inquiry is made for other purposes and not for credit. For instance, when you get your own report from CIBIL for employment, rental purpose or just to check your credit profile, it will be a soft inquiry.

Banks in India are pulling the credit reports of prospective employees, which are creating hard inquiries and consequently impacting the credit worthiness of the candidates. Every credit report directly pulled from CIBIL has to mention the reason for the inquiry. But banks often fail to do so, which are creating hard inquiries, although it is not done as per the permissible use of data as stipulated in the regulation (CICRA 2005).

So be very careful if you are applying for a job in a financial institution. Always ensure that the company does not pull your credit report unnecessarily. If you find that any such hard inquiry has been made, get in touch with CIBIL and also contact the organisation that has pulled your CIBIL report.

Rajiv Raj is the Director and Co-Founder of

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