A low credit score can usually narrow down your loan options, forcing you to take up hefty payments. Keeping track of your credit score and improving it is one way to get better affordable loan terms and rates. But will checking your credit hurt your credit scores? Read to know more.
Does a credit check lower your score?
Your credit score won’t go down if you check it on your own. It’s what they call the soft credit check or inquiry. But when a creditor or loan checks your credit, it’s usually a hard credit inquiry, which could hurt your score.
What is a soft credit check?
A soft credit inquiry is usually done by you or someone else with permission. Soft credit inquiries don’t hurt your credit score because you’re not actually asking for credit. And you don’t always have to give your permission for these kinds of inquiries.
When you ask for a copy of your credit record or look at your credit score, your credit score is safe from any hits. Soft credit inquiries also include when a landlord or job checks your credit or when a creditor checks your credit to see if you qualify for a loan or credit card.
What is a hard credit check?
A lender or creditor does a hard credit inquiry when you actually ask for credit. It can affect your credit score and may stay on your credit report for up to two years.
What can lower your credit score?
Checking your credit score won’t hurt it, but there are other things besides hard credit checks that can hurt it. Here are some factors that can affect your credit score:
Payment history: It keeps track of whether or not you pay on time. Your credit score can go down if you pay late.
Credit history: Your credit history is the length of time you’ve had your different credit accounts. Depending on other factors, the longer your credit history, the better your credit score might be.
Credit usage: Credit usage is the measure of how much you owe to how much credit you have. This is also called your credit utilization ratio. As a general rule, it’s best to use less than 30% of your cash.
Total balances: The sum of your present and past-due balances as you reported them last. The balance should be as low as possible.
Recent credit: It’s a record that has info on the no: of new credit accounts you’ve opened in the past year. Creditors and lenders usually do a hard credit check when you apply for credit. Having a lot of hard inquiries in a short amount of time can hurt your credit score.
Available credit: The credit that is given to you is the amount of credit you can use. This also affects your credit utilization ratio, so the better it is if you have more open credit than you have used.
When does checking my credit score lower it?
Hard pulls can cost you points. They happen when someone checks your credit report to decide whether or not to give you credit. These hard pulls shouldn’t be carried out without your understanding or permission.
You can get more data on hard inquiries via the free credit report summary online. You can also check your free credit report at Annual Credit Report.com to see who has looked at it in the last two years. Consumers can currently get these reports every week until 2023.
FICO, the company that made the most widely used score formulas, says that a hard inquiry could cost you up to five points. With VantageScore, a model for credit scoring that is becoming more and more common, a hard inquiry is likely to cost even more.
A “soft inquiry” or “soft pull” is when you or a creditor checks your score to see if they will give you a loan or credit card. A soft search doesn’t hurt your credit score in any way. So, if you ask for several credit cards at the same time, your credit scores could go down a lot.
Before you start the application process, take the time to learn about the best credit cards for your specific financial needs, keeping in mind the requirements for eligibility. A hard inquiry stays on your credit report for two years, but it doesn’t have as much of an effect on your credit score after that.
Why should you check your credit score often?
You’ll know if something is wrong if you check your credit score often. A big change in your score that you can’t explain could be the first sign that your name has been stolen or that there is a mistake on your credit report.
Before you ask for credit, it makes sense to know what the lender or credit card company will look at when deciding whether or not to give you credit. If you know your credit score, you won’t waste points by asking for things you won’t be able to get. You can also improve your credit score before you ask for credit if you know where you stand.
How to check your credit score without hurting it
When you check your credit score, keep these things in mind:
There are many kinds of credit scores, and often more than one. Make sure that every time you check your credit score, you use the same credit score and the same form of it. If you don’t, you’re not comparing apples to oranges. Models for figuring out an individual’s credit score look at most of the same things, but they may weigh those things differently or use different scales.
You don’t have to pay for credit monitoring or protection against identity theft to look at your numbers. You can get your score for free in a number of ways. They might come with a credit card, or you can get a free credit score online. In a time when data breaches and identity theft are common, it’s just good credit health to check your score often.
How often can your credit score be checked?
Checking your credit score as often as you want won’t hurt it, and it’s a good idea to do it often. At the very least, it’s a good idea to check your credit before asking for a loan, credit card, or anything else that requires credit.
When you do this, you can help make sure there aren’t any problems that could make it hard to get a new loan or credit account. If you check at least a few months ahead, you can also take care of anything that might hurt your credit score.
Checking your credit report at least once a year is also a good idea. Your credit score is a number that shows how well your credit is doing overall. Your credit report is where the information that goes into your score is found.
When you look at your credit record, keep an eye out for things you don’t know. If you find something strange, check with the lender to see if it’s real. A lender may sometimes do business under a different name and report to the credit bureaus under a name you don’t recognize.
If you’re looking for a car loan, the dealership may send your credit application to more than one lender. And if you find information you think is wrong or fake, you should tell the credit companies about it. Through Annual Credit Report.com, you can get a free credit report from each of the three credit companies once every 12 months. Every 30 days, you can also check your Experian credit report online for free.
Tips for improving your credit
If you are trying to build or rebuild your credit past, you need to check your credit score often. Here are some tips to help you improve your credit score as you look for ways to do so:
If you’re behind on payments, catch up and then pay all of your bills on time every month from now on. Keep your credit card balances low. Remember, the idea is to keep your utilization rate below 30%, but the lower it is, the better. If you have a lot of debt, try to pay it off as quickly as you can.
You could ask a family friend to put you on their credit card account as an authorized user. Make sure that the account has a good past that can help your credit score before they send in the request.
Don’t try to get new credit unless you really need it. Get credit for paying your utility and phone bills. Usually, these payments don’t get reported to the credit companies, but with Experian Boost, you can let Experian connect your bank accounts and use the data to find utility and phone payments. Once you’ve verified the accounts, Experian will be able to add them to your credit file. This may help your credit score.
Bottomline
Will checking your credit hurt your credit scores? Depends on what kind of credit pull, how often, and who is doing it. Soft pulls won’t affect your credit score, but hard pulls do. Make sure you are current with your credit score and keep it to the maximum. This way, your credit won’t suffer much if a lender does a hard pull.
FAQs
Is checking my credit score free?
People can get their credit scores for free from a lot of credit card companies and personal finance websites. But you may have to pay if you want a certain form from a certain credit bureau.
How many points does your score go down for an inquiry?
FICO says that for most people, it’s about five points for a “hard inquiry.” VantageScore could go down by up to 10 points, but it could get back to normal in about three months.
Is 3 hard inquiries bad?
There is no such thing as “too many” hard credit checks, but a lot of new credit account applications in a short time could mean the user is risky. No more than five points will be taken off your score for a single hard question. Many times, no points are taken away. But if you have more than one hard inquiry, it can drop your score by up to 10 points each time.
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