Does Checking My Credit Report Affect My Score?

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You probably already know that you’re supposed to monitor your credit on a regular basis. Doing so is a good way to catch reporting errors or identity theft, and it can also help you improve your credit scores over time. However, you may have heard that too many inquiries on your credit can lower your score. As a result, like many other people, you might be left wondering exactly how your credit is affected when you check it, and whether or not you need to be careful about doing so.

Different Types of Inquiries

It is unlikely that you are the only one checking your credit. Under the Fair Credit Reporting Act, many different entities and individuals are able request a copy of your credit report including lenders, employers, insurance companies, and landlords. When somebody accesses your credit report, the inquiry is usually noted on the report. However, it is important to realize that there are two types of inquiries—hard inquiries and soft inquiries—and whether or not an inquiry affects your score depends on what type of inquiry it is.

A hard inquiry is one that occurs when you apply for credit somewhere, and the lender reviews your report in order to make a decision about whether or not to approve your application. A hard inquiry might be made by a mortgage or credit card company, or when you apply for a car or student loan. In most cases, you have to authorize a hard inquiry on your credit, so when you look at your credit report, you should recognize any hard inquiries that appear there.

Unlike a hard inquiry, a soft inquiry is not related to you actually applying for credit. Instead, soft inquiries are usually the result of an individual or entity trying to get an understanding of what your credit is like. A soft inquiry might be made by an employer doing a background check, or a credit card company deciding whether or not to offer you a pre-approved card. When you check your own credit, it is also considered to be a soft inquiry. Soft inquiries can be made without your permission, so you may not even realize that a soft inquiry has been made until you look at your credit report. However, you are the only one who can see soft inquiries on your report, so when a lender looks at your report, they do not see soft inquiries.

How Inquiries Affect your Credit

The good news is that checking your own credit—or any other soft inquiry on your credit—does not have an effect on your credit score. That score is only affected by hard inquiries. While scoring models vary, experts estimate that a hard account inquiry can lower your score by one to five points. However, even a hard inquiry is not guaranteed to harm your credit. According to myFico, in some cases, one hard inquiry might not affect your FICO score at all. Hard inquiries stay on your account for two years, but some scoring models do not use them in score calculations after the first year.

Because hard inquiries can affect your credit score, it is usually a good idea to try to limit them. Most experts recommend that the best way to do so is by not making too many applications for new credit. If you do need to make multiple applications—for instance if you are shopping around for the best rate on a loan—they recommend keeping all your inquiries within a short window of time, because that way the inquiries may not have much of an impact on your score. In addition, it’s wise to monitor your credit to ensure that there are no unauthorized inquiries affecting your credit score. If you do see a hard inquiry on your credit report that you did not authorize, you can work with a credit repair company to try to remove the error.

Don’t Be Afraid to Check Your Score

The most important thing to remember is that you should not be afraid that checking your own credit will harm your score. You can check it as many times as you want to without affecting your score. In fact, failing to monitor your credit is the real danger, because errors can significantly harm your score. To keep your credit healthy, you should check both your credit report and your credit score on a regular basis.

If you do have a problem with negative items on your credit report, learn how you can start repairing your credit here. You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

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