How does Google manage aliases of a domain?

I have a website at a free webhosting. They assigned a free domain for my site, that is actually a subdomain of theirs. I wanted a custom domain name, I purchased one elsewhere, and I could assign that domain for my site with Cname. I have checked today, and Google found both the subdomain, given to me by the webhost, and my custom domain. Can it lower your rank in Google, or Google can see that the two names are related to each other? Google indexed many pages through my custom domain from my site, from the subdomain it only indexed the root so far. Today I added my custom domain to the Google webmaster tools, I hope this way Google will marginalize the subdomain I was given.