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Credit Score Myth: Does Checking Your Credit Score Lower It?

There’s a persistent, pesky myth in personal finance that checking your credit score will lower it. It’s time to clear up the confusion once and for all: pulling your own credit score will not negatively affect it in any way, period.

This common misconception stems from the fact that there are two types of inquiries: hard and soft. Only hard inquiries will lower your credit score. Let’s take a look at the differences between the two:

Soft inquiries

When you check your credit score, it’s considered a soft inquiry. Soft inquiries don’t lower your score because they’re for informational purposes only. For example, with your permission, landlords, employers, and even insurance companies can pull your credit score as part of a financial background check. Financial institutions may also access your credit report to send you pre-approved credit card offers.

While a soft inquiry might be noted in your credit report, it will not impact your credit score.

Hard inquiries

A hard inquiry indicates that you’re actively trying to obtain credit, whether it’s a mortgage, student loan, credit card, or auto loan. For example, when you apply for a credit card, the prospective lender will pull your credit report and check your score so it can decide whether or not to approve you. This is a hard inquiry.

It’s not a big deal if a single hard inquiry lowers your score by a couple of points—“new credit” only accounts for about 10% of credit scoring models, and hard inquiries are just one element within that category. With time, the hard inquiry’s effect on your score will be minimal. However, multiple hard inquiries can hurt your score because they signal that you’re desperate for credit, or don’t qualify for the kind of credit you need. In the eyes of the credit bureaus, this makes you a potentially risky borrower.

Unnecessary inquiries will whittle down your score and make it harder to qualify for the best interest rates, so only apply for new credit when you really need it, and only apply for credit you’re likely to be approved for.

If you’re rate shopping, try and keep your applications within a two-week period. Credit scoring models take into account that you might be shopping around for the best rate on a mortgage or car loan, so when multiple inquiries for the same type of credit are made within a short period of time (usually between 14 to 45 days), it’s treated as a single inquiry and won’t damage your score.

The bottom line

You shouldn’t be afraid to check your credit score—in fact, you should check it at least once a year, or prior to applying for a major loan such as a mortgage, to make sure there aren’t any errors. Your creditworthiness determines what loans you can qualify for and the interest rates lenders will extend to you, so knowing what affects your score is key to keeping it healthy.

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