Does checking my credit affect my score?
Understanding how credit checks impact your credit score is crucial for maintaining a healthy financial standing. Many individuals are often confused about whether or not checking their credit will have a negative effect on their score. In this article, we will explore the relationship between credit checks and credit scores, and provide you with the necessary information to make informed decisions about your credit health.
Hard Inquiries vs. Soft Inquiries
When it comes to credit checks, there are two types to consider: hard inquiries and soft inquiries. Hard inquiries occur when a lender checks your credit score as part of the loan application process. This type of inquiry can temporarily lower your credit score by a few points. On the other hand, soft inquiries are performed when you check your own credit score or when a company checks your credit for promotional purposes, and they do not affect your score.
The Impact of Hard Inquiries
While hard inquiries can temporarily lower your credit score, the impact is usually minimal and short-lived. Lenders typically consider the number of recent hard inquiries when evaluating your creditworthiness. If you have multiple hard inquiries within a short period, it may raise red flags for lenders, as it could indicate that you are applying for too much credit at once. However, if you have a good credit history and a solid credit score, a few hard inquiries will not significantly harm your score.
Monitoring Your Credit Score
Regularly checking your credit score can actually help you maintain a healthy credit standing. By monitoring your score, you can identify any errors or discrepancies in your credit report and take corrective actions. Additionally, staying informed about your credit score can help you make better financial decisions, such as avoiding unnecessary credit checks or paying down debt to improve your score.
Conclusion
In conclusion, checking your credit score does not affect your score in the same way as a hard inquiry from a lender. Soft inquiries, such as those performed by you or for promotional purposes, do not impact your score. However, it is essential to understand the difference between hard and soft inquiries and to be mindful of the number of hard inquiries you have within a short period. By staying informed and monitoring your credit score, you can maintain a healthy financial standing and make informed decisions about your credit health.
