DOES CHECKING MY CREDIT LOWER MY SCORES?

We get this question all of the time! The world of credit and finance always seems overwhelmingly daunting and complicated. Especially when it comes to credit, it starts to seem as though every single little thing you do has an affect on your score. This time you’re in luck! When you check your credit score through a credit monitoring system it does NOT lower your score. In fact, we would encourage you to regularly check your credit though a monitoring system.  Being aware and paying attention to your credit activity and payment habits are  extremely important.  However, there are different ways to have your credit score checked, and it is not always by you. This is where it starts to get slightly more complicated and has the potential to damage your credit. There are two types of credit checks; soft inquiries and hard inquiries.

Soft Inquiries -  

Soft inquiries are the type of checks or “inquires” that do not affect your credit. These are when you check your own credit score, or when somebody (normally an employer or landlord) checks your credit with permission, or when a specific lender conducts a credit check to pre-approved or pre-qualify you. So, there is no need to fear when you are applying to something you have already been pre-approved for! These inquiries do not have an effect on you because you are not formally applying or requesting new credit, just simply checking your credit score. It is highly recommended to check your score before applying for new credit to make sure that you qualify. Make sure when you do this you look it over carefully as everything on your credit report can be challenged or removed if it is false. 

Hard Inquiries - 

Hard inquiries are where the lines start to become slightly blurry. These inquiries happen after you have already applied for a new line of credit, whether that be an auto loan, mortgage, credit card, or any other line of credit. Lenders do these checks to determine whether or not they want to grant you the loan or credit card, it is just a part of their decision making process. Hard inquiries begin to pose a problem when you have an excess amount of them on your record. This could be a red flag to a lender that you are applying for credit everywhere or opening an excessive amount of accounts. This could be a sign for them that you are having a hard time keeping up with your bills or simply at risk of overspending. IN turn, these checks/inquiries have a temporary negative affect on your credit score.

In the long run, you should check your credit score before you actually apply for new credit because checking your scores does not have a negative affect on your credit score. It starts to affect your score when somebody else (a lender) has to perform these checks for you. Be aware and stay knowledgeable!

If you ever have questions, contact us - your expert consultants. 

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Solutions Team