How do you know when checking your credit will hurt or score?
When you check your credit yourself online, your credit score will not decrease.
This is because checking your own credit is a soft credit inquiry.
In this article, you will learn the difference between a soft and hard inquiry. A few websites and apps are available where you can get your credit score and report completely free.
Checking Your Credit Doesn’t Affect Your Score
When checking your own credit score on websites like Credit Karma and Credit Sesame soft credit pull and does not impact your credit score. When you check your own credit scores it’s considered a soft inquiry and does not hurt your credit score.
When a lender pulls your credit report, it will negatively affect your credit score. That’s because it’s a hard inquiry. A hard inquiry is when you authorize a lender or credit issuing company to check your credit.
What is a hard inquiry?
Hard inquiries happen when you apply for a loan or credit with a lender. Too many inquires show that you are desperate for cash or are having difficulties getting approved. If you have a short credit history without much payment history, inquiries will impact your credit score more than someone with established credit history. A single hard inquiry can lower your credit score by no more than 5 points.
- Car lease or loan application
- Applying for a student loan
- Personal loans
- Business loans
- Home loans
- Applying for credit cards
What is a Soft Inquiry?
A soft inquiry is when your credit is checked with or without your authorization by a company that you are not applying for a loan or credit with. For instance, when getting a car insurance quote or signing up with a new wireless carrier. Sometimes lenders will perform a soft credit inquiry to get an idea if you meet their requirements or not.
When companies make soft credit checks
Companies make soft credit checks when they are doing a very basic check to see if you’re creditworthy or not. Typically this is the case when getting an auto insurance quote, receiving a pre-approved credit card offer; even employers sometimes do a soft credit check.
- Checking your credit score online
- Getting a new phone carrier
- Auto insurance quotes
- Employer background checks
- Pre-Approved credit and loan offers
How to Know When a Credit Check will Affect Your Score
Usually, a company will only make a hard inquiry on your credit report if you’re trying to borrow money or get credit. A company cannot make a hard inquiry on your report without your authorization. Many times you won’t even know that a company does check your credit. Soft credit checks aren’t listed on your credit report, and some companies make a soft inquiry without your knowledge. These types of soft inquiries have absolutely no effect on your credit score, however.
When a company asks you for personal information such as your social security number and birth date, ask them if they will be checking your credit. If so, make sure it’s a soft credit pull so it will not negatively affect your credit score.
Checking your credit score will not have any impact on your credit score. This is a common misconception many people have. When checking your credit score, it’s considered a soft credit check. A soft inquiry will not lower your credit score. If you want to check your credit report, Credit Karma and Credit Sesame are two great websites that let you view your report and scores completely free.