Does Checking Your Credit Score Lower It

There is a lot of confusion surrounding credit scores and whether credit checks can either lower or increase it. One of the main fears and questions that people ask is does checking your credit score lower it? The answer is that it .....depends.

In this article I will cut through the confusion and myths on what can or cannot hurt your score.

Checking your credit score can be done in two ways. The first way is when you do it yourself and this is often referred to in financial circles as a soft credit enquiry and the second method is called a hard enquiry. Let's go into these in more detail so that you can understand them better.

(a) Soft Credit Enquiry

There are a couple of situations when a soft enquiry takes place. One of the most common ways is when you order your credit report from any of the three leading credit bureaus. Many people do this when they want to check their report before they apply for loans or if they suspect ID fraud.

A soft enquiry could also involve a landlord needing to check your payment history before they allow you to rent their apartment. They will want to make sure that you have ability to pay the monthly rent and have good record in doing so.

This can also happen when you apply for a job. The employment process can be expensive and time consuming which is why its imperative that employers make the right choice when selecting the best candidate for the role. Certain employers will make a soft enquiry to assess your suitability for the role.

The above examples do not involve you applying for credit and for this reason soft enquiries will not lower your credit score. Many people think that checking their report will lower there score. This will not.

Banks and lenders can also make a credit enquiry if they want to send you pre-approved offers through the post.

Actually, monitoring your report from time to time is good practice as one of the ways that can affect your credit fico score is if your report contains information that is either out of date or inaccurate.

(b) Hard Credit Enquiry

Hard inquiries are a result of you making an application for new credit whether, that involves a loan, mortgage, credit card or signing a contract for a cell phone.

For example, when banks send you a pre-approved offer for a loan or car insurance and you apply for that offer, the bank will make further checks into your credit file. Because you are asking for more credit this kind of check can have an affect on your credit rating.

The jury is out about how much this can affect your score however, generally speaking this will have a small effect apart from a few deducted points. Of course, this will differ depending on the state of each individuals personal finance history. If a person has already a history of missed payments, defaults and high levels of bad debt then, hard checks will have a greater impact on their score compared to a person who has a good credit history.

Opening new credit accounts in a short period of time would raise a red flag to companies such as the Fair Isaac Corporation who created the FICO credit score. Multiple accounts could signal a person who is desperately in need of credit. This would put this person in a high risk category.

When a hard enquiry or 'pull' is made it will appear on your credit report for you and other companies to see. Therefore, applying of multiple lines of new credit in a short space of time could have an adverse affect on your score.

Conclusion

In answer to the question does checking your credit score hurt your credit score? no, as long as it does not involve you applying for a new line of credit.

When you apply for new credit and open up multiple credit accounts in a short period of time then you could increase the risk of hurting your credit score.

I hope this cuts through the many credit score myths around what it actually affects and does not affect your score.

Related Articles

What Is A Bad Credit Score

Free Credit Report For Military

How To Read A Credit Report

Which Credit Report Is Best?

Restore Credit Score

credit score explanation

cic credit report

What Is Considered A Good Credit Score

Where Can I Check My Credit Score For Free

What Is The Highest Credit Score Possible