Will checking your credit score affect it?
Understanding how checking your credit score impacts it is crucial for maintaining good financial health. Many people are unsure about whether pulling their credit score can lead to a decrease in its value. In this article, we will explore this topic and provide you with valuable insights on how to check your credit score without negatively affecting it.
How Credit Scores Work
Before diving into the impact of checking your credit score, it’s essential to understand how credit scores are calculated. Credit scores are numerical representations of your creditworthiness, typically ranging from 300 to 850. Lenders use these scores to assess the risk of lending you money, such as a mortgage, car loan, or credit card.
Credit scores are influenced by several factors, including:
1. Payment history: Your payment history makes up the largest portion of your credit score, accounting for about 35% of it. It reflects whether you’ve paid your bills on time or have had late payments.
2. Credit utilization: This measures how much of your available credit you’re using. A higher credit utilization can negatively impact your score.
3. Length of credit history: The longer you’ve had credit accounts, the better it is for your score.
4. New credit: Applying for multiple new credit accounts within a short period can hurt your score.
5. Credit mix: Having a mix of credit types, such as credit cards, loans, and mortgages, can positively impact your score.
Hard vs. Soft Pulls
When it comes to checking your credit score, there are two types of inquiries: hard pulls and soft pulls. Understanding the difference is crucial to avoid unnecessary damage to your score.
1. Hard Pulls: A hard pull occurs when a lender checks your credit score as part of the loan application process. This type of inquiry can temporarily lower your score by a few points, as it indicates that you’re actively seeking new credit. Hard pulls can stay on your credit report for up to two years and can impact your score for up to a year.
2. Soft Pulls: A soft pull occurs when you check your credit score yourself or when a company checks your score for promotional purposes, like pre-approving you for a credit card. Soft pulls do not affect your credit score and can be performed as often as you like without any negative consequences.
How to Check Your Credit Score Without Affecting It
Now that you understand the difference between hard and soft pulls, here are some tips on how to check your credit score without affecting it:
1. Regularly check your credit score: You can check your credit score for free once a year from each of the three major credit bureaus (Equifax, Experian, and TransUnion) through AnnualCreditReport.com. This won’t trigger a hard pull.
2. Use a credit monitoring service: Many credit monitoring services offer free credit scores and reports, and they typically use soft pulls. Be cautious of services that charge for credit scores, as they may perform hard pulls.
3. Monitor your score for changes: By keeping an eye on your credit score, you can quickly identify any potential issues, such as identity theft or errors, and take appropriate action.
4. Review your credit reports: Regularly reviewing your credit reports can help you identify errors or discrepancies that could be affecting your score. You can request a free credit report from each of the three credit bureaus once a year through AnnualCreditReport.com.
Conclusion
Checking your credit score doesn’t have to affect it negatively. By understanding the difference between hard and soft pulls and taking advantage of free credit score checks, you can maintain a healthy credit score while keeping an eye on your financial health. Remember to regularly review your credit reports and scores to ensure that you’re on the right track to a strong credit history.
