Why Does Checking Lower Your Credit Score?
Your credit score is an important number that lenders use to determine your creditworthiness. It affects your ability to obtain loans, credit cards, and even impacts interest rates. One common misconception many people have is that checking their credit score can lower it. However, this is not entirely accurate. Let’s delve into why checking your credit score can affect it and answer some frequently asked questions about this topic.
1. How does checking your credit score impact your score?
When you check your credit score, it is considered a “soft inquiry” or a “soft pull.” Soft inquiries occur when you check your own credit score, and they do not negatively impact your credit score. These inquiries are not visible to lenders and are only visible to you.
2. Does checking your credit score too often affect your score?
No, checking your credit score too often does not impact your credit score. As mentioned earlier, soft inquiries do not affect your credit score. It is important to monitor your credit regularly, and doing so will not harm your creditworthiness.
3. Can checking your credit score with multiple credit bureaus lower your score?
No, checking your credit score with multiple credit bureaus will not lower your credit score. Each credit bureau operates independently, and checking your score with one bureau has no impact on the others. It is good practice to check your credit score with all three major credit bureaus (Equifax, Experian, and TransUnion) to ensure accuracy and detect any potential errors.
4. Do credit card companies checking your credit score impact your score?
When credit card companies check your credit score, it is considered a “hard inquiry” or a “hard pull.” Hard inquiries occur when a lender or creditor checks your credit score to make a lending decision. Unlike soft inquiries, hard inquiries can affect your credit score. However, the impact is usually minimal, and it typically lasts for a short period. Multiple hard inquiries within a short timeframe may have a more significant impact on your credit score.
5. How long do hard inquiries affect your credit score?
Hard inquiries remain on your credit report for two years. However, their impact on your credit score diminishes over time. After a few months, the impact becomes less significant, and after one year, it usually has no effect on your credit score.
6. Are there exceptions to hard inquiries not affecting your credit score?
Yes, there are exceptions. If you are shopping around for the best loan or mortgage rates, multiple inquiries within a specific timeframe (typically 14-45 days, depending on the credit scoring model) for the same purpose are treated as a single inquiry. This is known as “rate shopping” and allows you to compare offers without significantly impacting your credit score.
7. How can you check your credit score without affecting it?
To check your credit score without affecting it, you can use credit monitoring services or credit score simulators. These services allow you to access your credit score and credit report without triggering a hard inquiry. Keep in mind that these services may have subscription fees or require you to provide personal information.
In conclusion, checking your credit score does not lower it. Soft inquiries, such as checking your own credit score, have no impact on your creditworthiness. However, hard inquiries made by lenders and creditors can have a temporary and minimal impact on your credit score. It is essential to monitor your credit regularly to ensure accuracy and detect any potential errors. Remember that when shopping for the best loan or mortgage rates, multiple inquiries within a specific timeframe are treated as a single inquiry, minimizing their impact on your credit score.