It is not a secret that many people are concerned when they ask the question whether it is possible to damage your credit score by merely checking it. Since credit is so crucial when it comes to lending or other financial services, consumers have a desire to keep an eye on their scores but can be concerned that the process of viewing the data might harm said scores.
The good news for consumers is that merely checking one’s own credit does not adversely affect this credit in any way. Again, as most financial gurus and credit bureaus will agree, the process of running credit reports or credit scores does not reflect as an inquiry. However, soft inquiries, which include checking one’s own score, do not get reported and therefore do not affect the score in any way.
What Is a Hard Inquiry and What Is a Soft Inquiry?
What does lower your credit score are called are called hard inquiries. Hard inquiries are when a potential credit provider looks at your credit report because you have applied for credit. This would apply for instance where one is applying for an auto loan, mortgage, credit card, or any other type of bank loan. Any of these credit checks would fall under the category of what is known as a hard inquiry.
Multiple hard inquiries within a short time will have a detrimental effect on your score and makes you look risky to the lenders. However, when you check your own score, it does not qualify as a hard inquiry and you can check your own credit score as frequently as you want.
It is wise to monitor your credit
Contrary to what you think, it is actually wise to check your credit report and score often. In fact, consumers are also allowed to get a copy of their credit report from the three major credit agencies: Experian, Equifax, and TransUnion, for free once a year.
It helps you confirm that all the information in your reports is correct and that you have not been scammed by identity thieves. In the case where an error does occur, or fraudulent activity is found then you can have it deleted by reporting it which in turn may boost your score. Therefore, it is recommended to keep a check on your credit as this will help in enhancing as well as maintaining it.
The question that arises here is how often one should check their credit report?
Many financial professionals suggest reviewing your credit reports from the three major bureaus at least once annually. Also, it is advised to track this more frequently, for example, one must log in to monitor the scores in every 3-6 months at least. Fortunately, there are many free tools today that can help you monitor your score without having to sign up for credit monitoring services.
The most popular free services used to check credit scores without impacting your credit include:The most popular free services used to check credit scores without impacting your credit include:
• Credit Karma – This company provides credit scores from TransUnion and Equifax for free. Updates scores monthly.
• Access Credit Scorecard – Free even if you are not a customer. Rebuilds your Experian FICO score every month.
• Mint Credit Monitoring – Free service includes credit score report updated every month.
• Credit Sesame – Free monthly updates to credit score.
• Check Your FICO Score – Free FICO score check every month through your Wells Fargo credit score check.
• Bank Credit Card Score Checks – Unlike many other credit score services, many bank credit cards such as Citi and Discover provide FICO scores on your monthly credit card statements, or by viewing it online.
As you can see, there are a lot of simple and safe methods to check your credit score on a daily basis or even once a month, which will not shave off any points from your credit score.
What Does Lower Your Score
Consumers should stop doing things that can hurt credit and should not spend much time thinking about credit checks. The biggest issues that can lower your credit scores include:The biggest issues that can lower your credit scores include:
• Missing payments • Defaulting on loans • Borrowing money to the limit • Applying for new credit with several other merchants at one time • Lack of sufficient credit history • Having high balances compared to limits.
Consumers can also manage these additional factors to build the best scores:Consumers can also manage these additional factors to build the best scores:
• Have low balances on credit cards. • Ensure all the bills are paid on time • Minimize utilization of hard inquiries by only applying for credit where necessary. • Establish good credit history with both length and credit mix.
The Bottom Line
Well, can checking your credit score actually lower it? Absolutely not! Consumers should feel fully at ease with the idea of checking their credit as frequently as they please. To the contrary, checking does not have any ill effects at all, and enables one to keep an eye on their credit and prevent problems.
You can use as many of the available free credit tools for checking your scores on a monthly basis. The only thing not to do is to apply for a new credit that you do not need with a high frequency. Remember to adhere to those principles of credit card management and your scores will be just fine.
