India, July 3 -- Every time you apply for a loan or credit card, the lender checks your credit report. That check leaves a mark. Most people don't think twice about it, but those marks add up, and they can quietly drag your credit score down if you're not careful.

What happens when you apply for a loan

When you submit a loan application, the lender pulls your credit report from a credit bureau like CIBIL to assess your creditworthiness. This pull is recorded on your report as an "enquiry" or "inquiry." It stays visible to future lenders for up to two years, though its impact on your score fades well before that.

The logic behind this is straightforward. If someone is applying for credit in multiple places within a short window, it can ...