Does checking your credit affect your credit score? This is a common question that many individuals ponder when considering whether to check their credit report or score. The answer to this question can vary depending on the type of credit check being performed. In this article, we will explore the different types of credit checks and their impact on your credit score.
Soft inquiries, also known as soft pulls, are credit checks that do not affect your credit score. These inquiries are typically performed when you check your own credit score, apply for a pre-approved credit card, or when a lender checks your credit score to offer you a promotional rate or service. Since these inquiries are not visible to other lenders, they do not have any negative impact on your credit score.
On the other hand, hard inquiries, also known as hard pulls, can have a negative impact on your credit score. A hard inquiry occurs when you apply for new credit, such as a mortgage, car loan, or credit card. When a lender performs a hard inquiry, it indicates that you are actively seeking new credit, which can be viewed as a potential risk factor. Multiple hard inquiries within a short period of time can cause your credit score to drop, as it may suggest that you are credit-dependent or struggling to manage your finances.
It’s important to note that while hard inquiries can temporarily lower your credit score, the impact is usually minimal. For example, if you have a high credit score, a single hard inquiry may only cause a small decrease. However, if you have a lower credit score, the impact may be more significant. It’s also worth mentioning that the effect of a hard inquiry on your credit score fades over time, and it can take up to a year for it to disappear completely.
So, does checking your credit affect your credit score? The answer is that it depends on the type of credit check. Checking your own credit score or being pre-approved for a credit card will not hurt your credit score. However, applying for multiple new lines of credit within a short period of time can have a negative impact. It’s essential to manage your credit wisely and avoid unnecessary hard inquiries to maintain a healthy credit score.
In conclusion, understanding the difference between soft and hard inquiries is crucial in determining whether checking your credit will affect your credit score. By being aware of the potential consequences and making informed decisions, you can protect your credit score and maintain a good financial standing.
