Does Checking My Credit Affect My Credit Score?
You may have heard that too many credit inquiries can hurt your credit score — which is true. Mostly. But not all inquiries are created equal. Hard inquiries — when lenders check your credit report because you’ve applied for credit — are the ones that affect your score. Checking your own credit report is not a hard inquiry and thus will never drag down your credit score.
Checking your credit can actually improve your score if you see mistakes on your credit report and are able to get them corrected. It can also alert you if lenders are making hard inquiries that you did not authorize, a sign of potential identity theft.
Here’s a rundown of which inquiries will have an effect on your score, and which ones won’t.
A breakdown of the types of credit inquiries
There are two types of inquiries on your credit report: hard inquiries and soft inquiries. Let’s take a closer look.
What’s a hard inquiry?
When a lender checks your credit because you’ve applied for an account, it’s considered a hard inquiry. This includes credit checks after you’ve applied for an auto loan, mortgage or credit card. A hard inquiry is the only type of inquiry that can affect your credit score. It affects your score because it’s an indication that you might be taking on more debt.
Usually, each time a lender checks your credit, it counts as a single credit inquiry. One exception occurs when you are “rate shopping.” FICO, the company that generates FICO Scores (the credit score most commonly used by lenders), considers all inquiries for a mortgage, auto loan, student loan or apartment rental within a 45-day period as a single credit inquiry. If you do your house hunting or rate shopping within that period of time, you can avoid having those multiple inquiries lower your FICO Score.
Generally speaking, hard inquiries don’t have a major effect on your score. According to FICO, a single inquiry will usually reduce your FICO Score by fewer than five points. Because a FICO Score ranges from 300 to 850, that’s not a significant amount.
It’s also worth noting that the effect on your credit score probably won’t last very long. Hard inquiries stay on credit reports for about two years, and in many cases, your credit score could bounce back sooner than that.
Here are some examples of credit checks that could result in hard inquiries:
- When you apply for a credit card
- When you apply for a mortgage
- When you apply for an auto loan
- When you buy a new cellphone and the carrier checks your credit before adding you to a new plan
- When a potential landlord checks your credit before allowing you to move in (though this could also result in a soft inquiry)
- If a car rental company pulls your credit report because you want to pay with a debit card rather than a credit card
- If you ask your credit card issuer for a credit limit increase that counts as another application for credit
What’s a soft inquiry?
Like a hard inquiry, a soft inquiry is a notation that is recorded when a lender or another party has looked at your credit report. However, unlike a hard inquiry, which is listed on your credit report for others to see, you are the only one who can see your soft inquiries. These do not influence your credit score.
A common misconception is that you can lower your credit score by checking your own credit report. However, checking your own credit is considered a soft inquiry and does not have an effect.
Here are some examples of soft inquiries:
- Checking your own credit report
- Lenders that pull a credit report to gauge whether to send you a preapproved offer
- Insurance companies that check your credit before offering an insurance rate
- Medical providers
- Prospective employers
How to check your credit report
You are entitled to one free copy of your credit report from each of the three credit bureaus (Experian, TransUnion and Equifax) every 12 months. You can get your free credit reports at AnnualCreditReport.com.
Credit reports contain some standard information:
- Your Social Security number
- Your name, including maiden and married names, if applicable
- Your birth date
- Addresses of current and previous residences
- Telephone numbers that you’ve used or have been associated with you on your phone bills
- Employment information
- Civil judgments
- Revolving credit
- Installment loans
- When an account was opened, the balance, payment history and when the account was closed, if applicable
- Hard inquiries (visible to others)
- Soft inquiries (visible only to you)
How to check your credit score
You can check your credit score for free by signing up for My LendingTree. This can help you discover factors that influence your score and find ways to boost it.
The bottom line
It’s important to check your credit report to stay in good financial standing and recognize any potential errors that should be disputed. And while hard inquiries can have a modest effect on your score, checking your own report is considered a soft inquiry, which will never affect your score. Don’t let fear of hurting your score stop you from checking your credit — it’s always better to know what lenders are seeing.