Does Checking Your Credit Score Affect It?

Does Checking Your Credit Score Have An Impact

In most cases, you do not have to worry that by running your credit score you are damaging it. When you run a credit check on yourself, this is referred to as a ‘soft credit check,’ ‘soft credit pull,’ or ‘soft credit pull. ’ Unfortunately, this kind of inquiry doesn’t have any bearing on the credit score that is assigned to you. A soft credit check is used because you are eligible for a free credit report check and score as well and the action does not indicate that you are applying for credit. Credit checks conducted for employment purposes, rental, or insurance purposes do not count as ‘soft inquiries’ and therefore only the ‘hard’ inquiry that is done when you apply for credit, for instance, a mortgage, car loan, credit card, or personal loan impacts your score.

Soft Versus Hard Credit Inquiries – What Are They?

Soft Inquiries These inquiries allow you to check on your own credit file or credit score and to keep track of your credit. Here are some of the actions that trigger a soft pull on your credit report and do not impact your score: Using a website like annualcreditreport.com or creditkarma.com to check your credit report or score. The process of applying for an auto loan or a mortgage, but not as a full application. Fill in your details into an online pre-qualification credit card application form. Ensuring that there are no identity theft alerts. Selling a car or property and providing personal information to the buyer. Activities in which your credit report is needed for business transactions. Insurance companies run credit checks before giving you a quote.

The most important aspect to understand is that soft inquiries are details that you have applied or agreed to so that you can check your credit status yourself. They do not inform you that you have applied for new credit.

Hard Inquiries These inquiries suggest further that you have sought other credit and credit checks by the lender in the process. The credit score may be negatively affected by hard inquiries. The following lists some instances of what could cause a heavy draw on your report: Getting a credit card, a personal loan, an auto loan, or a mortgage. Adding a new utility service connected to a credit check: phone, cable, or energy. Starting a job where one has to provide personal credit card information as a security deposit. Following a new mobile phone plan means running through a credit check. Asking for a leasing agreement. One of the requirements of a job application or background check—which the potential worker never consented to—is a credit check.

Hard inquiries indicate either you have new credit obligations the credit reporting agencies and scoring systems feel need a second look or you are now searching for extra credit. Generally speaking, if there is just one more inquiry while several harsh inquiries conducted in a short time would lower your score.

Things influencing your credit score: Items influencing your credit score: FICO claims that these elements and percentages affect your total credit score: 35% is the payment history. Amounts due: thirty percent Fifteen percent of credit history Credit mix: ten percent. Ten percent of new credit

New credit inquiries and credit applications account for only 10% of your overall score, as you may calculate. Given that your credit score is a soft pull about a fresh loan application, another demand for it won't matter.

Where to Get Your Credit Score for Free?

You are legally allowed to obtain a free credit report from three major credit bureaus, namely Equifax, TransUnion, and Experian, once per year at the website annualcreditreport.com. However, you will not receive your credit score from the annualcreditreport.com website. To get your actual credit score, some additional actions are needed.

The website that is most frequently used to check credit scores is Credit Karma. Credit Karma offers credit monitoring services, which, unlike many other services, do not harm the consumer’s score. They provide an accurate credit rating and credit tracking tools used daily. Other popular sites for accessing your credit score for free include Credit Sesame, Wallethub, Nerdwallet credit score section, and some other personal finance websites like Bankrate and Value Penguin. Several banks also allow you to check your credit score for free through their online banking platforms.

These third-party services do not demand one to pull a hard credit to obtain a score, even if they are inclined to offer products and services of affiliated companies. Their credit monitoring services are allowed through contracts with the credit bureaus and banks which enables them to sneak in a peek at your score even without your permission for each inquiry.

However, consumers can always go back to Experian, Equifax, and Transunion websites and purchase credit reports, scores, detailed analysis, and credit monitoring services when they wish to. But the payment is not only for your basic free report and score though.

When Does It Make Sense to Check Your Score?

This is because the frequency with which you check your score can be an issue depending on how you go about it. For instance, if you frequently use a site that updates your credit score by performing hard inquiries on a daily or weekly basis, it could reduce your score. Nevertheless, what many people do, which is to check their credit score one or two times per year is not a problem.

That is why most financial experts advise clients to monitor at least one of their credit scores every six months, and even more often if they are trying to rebuild their credit. An annual or semi-annual view assists you in checking for issues like errors on your report, fraud indicators, and credit progress. It is advisable to only use the soft inquiries and not the hard ones each time you check the sites.

Soft Credit Check Services

The best and most frequent way one could use to monitor their credit score is by signing up for a credit monitoring service that allows soft credit checks. As mentioned earlier, sites like Credit Karma offer free credit scores & reports with only soft credit checks to notify you about important changes and new trends in your credit standing over time. Credit monitoring provides information on new accounts, credit inquiries, late payments, accounts placed for collections, score updates, and much more. While hard credit checks are done for loan and credit card applications, this way, you manage credit standing in between.

The consequences of checking your credit report will not be negative if you use a reliable credit monitoring and reporting site and can afford to check as often as you wish. You can check daily, weekly, or monthly as a way of tracking all the things reported to your credit file frequently without any impact on your score from multiple hard inquiries. These soft pull options allow for credit insight regularly without the negative effects of too many application files that focus on new credit in your report.

Summary: Why Checking Your Credit Score Doesn’t Harm It?

While this leads to a different type of inquiry – “soft pull” as opposed to the “hard pull” when you check your reports for a new credit application. Inquiries that hurt your credit score are even harder ones that result from a new credit application. Therefore, as long as you opt for methods that involve a soft pull instead of a hard pull, it is not something you should be concerned with as frequently checking your score will not damage it. The practice of credit score monitoring can help spot issues that need to be addressed and work on having a steadily better score. While multiple hard inquiries can negatively impact your score, soft pull access enables you to check your credit status more frequently to ensure it remains accurate and favorable.

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