Does Checking Your Credit Score Lower It?
- October 22, 2018
- Posted by: Nate Matherson
- Category: Credit Scores
At a Glance:
Does checking your credit score lower it? Contrary to popular belief, there are ways to check your own credit score without lowering it. In fact, it’s a good idea to routinely check your credit score to watch out for errors.
In June, Discover conducted an online survey of more than 2,000 credit card holders. The data revealed that more consumers are aware of their credit score this year as compared to last year.
But the survey also showed that while more awareness exists, many consumers are still confused when it comes to their credit. For instance, one in five credit card holders believes that checking their credit score will lower it.
This finding underpins a common misconception among consumers regarding their credit. Contrary to popular belief, checking your credit score will not lower it. In fact, it’s a good idea to routinely check your credit score to watch out for errors.
When you check your credit score, you’re doing what’s known as a soft inquiry. However, a hard inquiry will temporarily lower your score. Let’s look at each inquiry more closely.
Jump to a section:
How Inquiries Affect Your Credit Score
To understand how inquiries affect your credit score, you need to understand the difference between hard and soft inquiries.
- Hard inquiries do have a temporary negative impact on your credit score. This happens when you apply for a new loan or credit card and the lender or issuer checks your full credit history.
- A soft inquiry is not a full credit evaluation and is not typically used for final lending decisions. Instead, lenders perform soft credit checks to show you the types of rates you could qualify for.
Both inquiries are reported to the credit bureaus, but only the hard inquiry will count against your credit score.
If you make multiple hard inquiries in a short period of time, it can negatively impact your credit score. Hard inquiries can stay on your credit report for up to 24 months, but they stop affecting your credit score after 12 months.
For individuals with extensive credit histories, the impact of a hard inquiry will be fairly minimal. However, if you are in the process of building your credit history, you should be careful not to make too many hard inquiries within a short window of time.
How to Check Your Credit Score
Everyone has credit scores from the three major credit bureaus: TransUnion, Equifax, and Experian. Credit scores range from 300 to 850, with anything over 700 being considered a good credit score and anything under 600 considered fairly poor.
It’s a good idea to stay on top of your credit score so you’ll know what rates you’re likely to be approved for and where there might be room for improvement. It’s also important to routinely check your credit report for incorrect or missing information.
Luckily, it’s easier than ever to check your credit score. Everyone is legally entitled to a free credit check once per year. There are free credit report sites that allow you to check your score throughout the year as well.
There are a lot of misconceptions that still exist about credit scores and what will or won’t affect them. You can rest assured, however, knowing that checking your credit score will not cause it to drop. In fact, routinely checking your credit score is part of building good financial habits.
It’s a good idea to request a copy of your credit history from all three major credit bureaus to check for accuracy. You’re also entitled to see a copy of your credit report within 60 days of being denied for a loan.
The important thing is to make sure you monitor your credit score so you are building good financial habits. If you don’t know what your credit score is, then it will be hard for you to make informed decisions when it comes to applying for a loan.