A credit score is one of the principal criteria that lenders banks and other credit-granting institutions consider when assessing an application for a loan, credit card, or any other form of credit. Credit rating shows the creditworthiness of a borrower where a high score is usually an indication that the borrower has been a good credit risk in the past and will be in the future. Conversely, where the credit rating is low, this means higher risk and such a person might be denied credit or charged high interest on the credit granted.
Since credit is so important, many people have the desire to track their credit score. However, a common misconception is that having credit scores checked frequently by credit reporting agencies or checking them frequently also has a bad effect on the score. The actuality, however, is that the major credit reporting models that are in use in the United States enable one to check on his credit scores as frequently as he wants without suffering any consequences. This article gives the reasons why one should not worry about whether checking his/her credit will lower his/her credit score and the ways to do it on your own.
Why You Should Not Worry About Your Credit Score Deteriorating After Checking It?
Your credit suffers for some period whenever lenders, banks, or any other company access it. This is known as a hard inquiry. When we ask for our credit score, however, this is given as a "soft credit check" and has no effect on our credit score whatsoever. Requesting your credit report with the credit bureaus results in these often referred to as "soft inquiries." This implies that the customer is free to examine his/her credit report as many times as he/she wants for monitoring reasons without worrying about any negative impact on the score.
Some sources claim that the credit bureaus see regular access to your score—daily or weekly—as insecurity and can reduce the score. But this is the most false information one could provide another, not at all how credit rating systems work. This is maybe the most crucial component of this learning strategy; you may check your score as much as you like without suffering any consequences. These are also soft queries and cannot damage your credit when you utilize services to view your credit score and report often.
Sometimes, people want to know where they can check their score for free or what is a good credit score to have.
Equifax, Experian, and TransUnion are the three main credit bureaus in the United States, and at the website annualcreditreport.com, you can access your credit reports free of charge, but only once per year. This website was developed to enable the consumer to view reports as entitled by federal law. When you apply for your reports through this site, the website generates your credit information without dinging your score.
They failed to note that the check on the actual credit score is not as commonly offered as the free report.
However, there are still several ways to obtain your score at no cost Here are some options:
- COMMON FACTORS Most credit card issuers and banks include free customer access to FICO or VantageScore online. If you have an account with the credit bureau, go to the account portal to check whether a free score is offered.
- VantageScore credit scores can be obtained from Credit Karma and Wallethub personal finance sites as well as periodic updates throughout the year.
- Certain financial institutions and lending companies provide free trial scores when you choose to receive offers on loans or credit cards in your mailbox. It will be the same soft inquiry score you will be seeing and no effect will be on your credit report.
Moreover, the FICO Score, which was available for purchase only by business owners, is now free for all consumers to help make them more financially empowered. Go to www.fticoscore.com or go to FICO Score. com and click on Get Your FICO Score to view your score pull report and Experian material without a detrimental impact.
What Factors Should I Consider When Deciding When To Check My Credit Score?
This is why you should check your credit score as often as possible throughout the year not just when you need credit. The fact that your check runs every three to six months will enable you to check for any scams and ensure that your profile is healthy before you intend to make major purchases or apply for loans.
Here are some good times to review your credit:
- Before Applying for Loans: See your score a few months before you plan to borrow a large amount of money for the purchase of a house or car through a mortgage auto loan or apply for a personal loan. This provides you with time to learn the nature of your creditworthiness, and this increases the chances of having your credit availed to you.
- After Opening a New Credit Card: It is common for a newly created account to have a slight negative impact on scores for a short while. Wait for three to six months and check again your score if it has bounced back.
- When Monitoring Identity Theft: It is recommended to check your credit score often as this helps in identifying suspicious activities such as hard inquiries or new accounts that you do not know of.
- After Major Life Events: Some of them include; Marriage divorce new addresses or new employers can change your financial outlook or status. Make sure to look for such changes and see how these affect your credit status.
- When Reviewing Credit Reports: The rating that you receive from your credit reports or your scoring models gives a better explanation of what affects credit rating when compared to the three credit reports.
One should try to check his/her credit score as often as possible since it is a vital aspect that helps in determining the health of credit, but this should only be done through the appropriate methods of requesting reports as soft inquiries. While using your personal credit information for a variety of purposes, other than for identity verification, such as for employment or renting an apartment, is allowed, you will be relieved to know that it does not negatively affect the score once you get it from the credit bureaus or any other credit monitoring agency. It helps you monitor your credit score as frequently as possible so that you are in a position to reverse some of the actions that have gone wrong.
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