February 18, 2026 · 5 mins read
Santosh Kumar
Just like when you apply for a loan, they will typically run a credit check to see your repayment ability and financial trustworthiness. A lot of borrowers think about submitting several applications at once, hoping that they’ll get approved on at least one. But this can impact your credit profile and even ding your score if you’re not careful.
Knowing how loan applications affect your credit score enables you to make smart financial choices and preserve a healthy credit record.
Banks check the CIBIL score to approve loan requests, set interest rates, and make other risk assessments. Repayment history, credit utilisation, length of credit history and credit enquiries affect the score.
But submitting several loan applications in a short space of time can impact one of these, credit enquiries.
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When you are approved for a loan or credit card, the lender pulls your credit report to determine if you qualify. This is known as a hard enquiry/hard credit check. Each hard enquiry goes on your credit report.
A lone loan enquiry typically only has a slight effect on your credit score. But lots of loan applications in a short time may suggest financial difficulty or a higher level of credit need and that can dip your score for a little while.
Lenders are prone to thinking that if you’re applying all over the place, you must be desperate and that makes you a risky customer.
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Sending out a few loan applications at once exposes your credit report to multiple hard enquiries. Every enquiry also bangs your credit score a little, and multiple enquiries in a tight window can have a cumulative effect.
This decrease is generally short-lived, but it can impact your loan approval odds if lenders check your credit profile during that time. A lower score might also cause lenders to charge you higher interest rates or impose more rigorous loan conditions.
It’s also affected by how many you’ve applied for, with how much time in between, and your general credit history. Consumers with good credit may see a minimal impact, whereas those limited history will feel the pinch more.
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Know the difference between hard and soft credit enquiries. A hard enquiry is when you actually apply for credit and give the lender permission to see your credit report. This kind of enquiry hurts your credit.
A soft enquiry is when you look up your own credit score or when banks run promotions. Soft enquiries don’t impact your credit score.
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Going for a bunch of loans at once will make you less likely to get approved. Lenders check recent credit activity quite closely before issuing loans. Multiple recent applications can indicate financial trouble or an increased risk of default.
Even if your earnings and repayment ability are sufficient, a large volume of recent enquiries can cause alarm. This can lead to loan denial or tougher scrutiny by lenders.
A solid credit history with few enquiries not only increases your likelihood of approval, but also strengthens your overall creditworthiness.
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Your score may be lower because you will have several hard inquiries in a short time frame from applying for more than one loan. However, they are usually only temporary. The degree to which they will affect your score is based on your overall credit history.
There are no set numbers for how many applications will be viewed as excessive by lenders and may also change your credit score based on what’s happening with your credit history at the time of those applications.
Yes, when you are turned down for a loan your credit inquiry from that denied loan application would have been recorded and may affect your score slightly as well.
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