Does Checking Your Own Credit Score Hurt Your Credit?

 

A lot of people avoid checking their own credit because they're afraid it will lower their credit score.

Fortunately, checking your own credit is generally considered a soft inquiry, not a hard inquiry, and does not hurt your credit scores.

Understanding the difference between soft and hard inquiries can help you monitor your credit without unnecessarily worrying about your score.

1. What Is a Soft Inquiry?

A soft inquiry can occur when you check your own credit or when your credit information is reviewed for certain purposes that aren't applications for new credit.

Soft inquiries generally do not affect your credit scores.

That means regularly reviewing your own credit doesn't cause your score to drop simply because you looked at it.

2. What Is a Hard Inquiry?

A hard inquiry generally occurs when a lender checks your credit in connection with an application for credit.

Examples may include applying for a:

  • Credit card
  • Auto loan
  • Mortgage
  • Personal loan
  • Other financing

Hard inquiries can potentially affect credit scores, although the effect varies depending on the overall credit profile and scoring model.

3. Checking Your Credit Can Actually Help You Prepare

Avoiding your credit report because you're worried about hurting your score can work against you.

Reviewing your credit gives you an opportunity to identify high balances, late payments, collections, unfamiliar accounts, and potentially inaccurate information before you apply for financing.

4. Your Credit Reports and Credit Scores Aren't the Same Thing

Your credit reports contain information about your credit history.

Credit scores are calculated using information from those reports through a particular scoring model.

You can therefore have multiple credit scores depending on the credit bureau, scoring model, and version being used.

The score you see through one service may not necessarily be the exact score a particular lender uses.

5. Don't Be Afraid to Monitor Your Credit

Regularly reviewing your own credit can be an important part of managing your financial life.

It can help you spot unexpected changes, identify potential reporting problems, watch your balances, and prepare before applying for financing.

6. Be More Careful When APPLYING for Credit

Checking your own credit is different from submitting multiple applications to lenders.

Before applying, understand what you're applying for and whether your credit profile appears ready.

The goal isn't to be afraid of credit inquiries. It's to understand which type of inquiry is occurring and why.

7. Knowledge Gives You Time to Act

Finding a problem six months before applying for a mortgage or vehicle loan gives you time to investigate it.

Finding the same problem while you're sitting in a lender's office doesn't.

Monitoring your credit allows you to understand your position before someone else makes a financing decision based on it.

🔵 Want to Know What's Really Affecting YOUR Credit?

I created a FREE Credit Roadmap to help you better understand your credit, credit restoration, funding readiness, business funding, and consumer-rights options.

🎁 FREE BONUS: You'll also have the opportunity to receive a FREE Credit Evaluation to help identify what may be affecting your credit and where improvements may be possible.

No obligation.

👇 GET YOUR FREE CREDIT ROADMAP HERE 👇

 

Comments

Post a Comment

Popular posts from this blog

How Collections Affect Your Credit and What You Should Know

Image
  A collection account can create serious problems for your credit profile. Collections generally occur when a debt becomes significantly delinquent and the original creditor sends or sells the account to a collection agency. But seeing a collection on your credit report doesn't mean you should immediately pay it, dispute it, or ignore it. First, understand exactly what is being reported. What Is a Collection Account? A collection can occur when an unpaid debt is transferred or sold to a company attempting to collect the balance. Collections can involve many types of obligations, including: Credit cards Personal loans Medical bills Utilities Phone or internet services Other unpaid accounts The original account and a collection account may sometimes both appear on your credit reports, depending on the circumstances. 1. Collections Can Affect Your Credit Scores Collection accounts are negative credit information and may affect credit scores. The actual effect varies ...
Read more

Understanding Credit Scores: What They Are and Why They Matter

Image
  Your credit score is one of the most recognized numbers in personal finance. Lenders may use credit scores when deciding whether to approve you for a credit card, auto loan, mortgage, personal loan, or other financing. Your credit can also affect the terms you're offered. But a credit score isn't just a random number. It's calculated using information contained in your credit reports, and understanding what influences that number can help you make better credit decisions. What Is a Credit Score? A credit score is generally a three-digit number designed to help lenders evaluate credit risk. Different scoring models exist, including FICO® and VantageScore® , and lenders don't necessarily use the same score or version. That's why the score you see through one service may not exactly match the score a lender sees. Your score can also differ between credit bureaus because the information contained in your Experian, Equifax, and TransUnion reports may not be i...
Read more

7 Things That May Be Hurting Your Credit Score Without You Realizing It

Image
  Your credit score can affect much more than whether you get approved for a credit card. It can influence the interest rates you pay, your ability to finance a vehicle or home, and even some employment opportunities. The frustrating part is that several things can hurt your credit without you realizing how much damage they're doing. Here are 7 things that may be hurting your credit score — and what you should know about each one.   1. High Credit Card Balances Even when you make every payment on time, carrying high balances compared with your credit limits can affect your credit scores. This is known as credit utilization. For example, if you have a credit card with a $10,000 limit and a $9,000 balance, you're using 90% of the available credit on that card. Lowering those balances can potentially improve the utilization portion of your credit profile.   2. Missing a Payment by 30 Days or More Payment history is one of the most important factors used in many credit-sc...
Read more