Does Checking Your Credit Hurt Your Score?
Summary: A credit score is a three-digit number that predicts the likelihood of a borrower making on-time payments. A handful of actions can impact your credit score; however, self-checking your score does not hurt it. Regularly checking your score is recommended to ensure all information is correct.
A credit score is a three-digit number that determines the financial habits of a borrower. The scoring map typically falls between 350 to 850 and is primarily used to predict the likelihood of a borrower making payments on time. Credit scores are used by auto lenders, mortgage lenders, refinance landlords, and any individual or institution that is offering you a new line of credit.
Credit reports document all types of information ranging from payment history to the types of debt the buyer currently owes. Lenders and buyers may see soft and hard inquiries on their report. But what are they?
Soft inquiries can be an employer looking at an employee’s credit score or the individual checking their own score. Soft inquiries do not affect credit scores and are primarily used for awareness. Buyers can check their credit score to be aware of their financial footing, track their score, or make improvements by making changes.
Hard inquiries show up when a buyer is applying for a new line of credit. If auto lenders, mortgage lenders, or credit card lenders pull a credit report, this will show up as a hard inquiry. These lenders evaluate your credit score to offer you a housing loan, a car, or credit cards. Consumers may see a dip in their credit score after a hard inquiry (usually only 3 – 8 point drop and will rebound in about 30 days.
Breaking the Myth
To keep it simple, checking your credit score does not hurt it. Here are actions that do affect your credit score:
- Payment History
- Amounts Owned in relation to the credit limit
- Length of Credit History
- The different types of credit lines/loans currently taken out
- New lines of credit/loans
Regularly checking your credit score is recommended to help put yourself in the best financial situation possible. Checking your score holds a handful of benefits, a few are:
- Ensuring all information is accurate
- Improving your credit score
- Tracking the score’s progress
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