Your credit score is crucial to your financial well-being. It frequently impacts decisions such as applying for a loan, renting an apartment, or securing a lower interest rate. With so much importance placed on it, it’s natural to wonder if checking your credit score can hurt it. After all, many people worry that even small actions can lower their scores.

In this article, we will dive into whether checking your credit score affects it, what the different types of credit checks mean, and how often you should be monitoring it. Understanding this can help you take charge of your financial health without unnecessary concerns.

What Happens When You Check Your Credit Score?

When you check your credit score, you're basically looking at a picture of your credit report. It can help you know how healthy your finances are, how lenders see you, and whether you're on track to meeting your financial goals. However, the type of credit check is important: there are two types of credit checks: hard and soft inquiries.

A soft inquiry is when you check your credit score or when a company checks your credit for some promotional reasons, like pre-approved credit. A hard inquiry happens when a lender or financial institution checks your credit as part of the process of applying for a loan, mortgage, or credit card.

The good news is that checking your credit score is a soft inquiry. This does not negatively impact your credit score, but you can check it as frequently as you like without incurring any adverse consequences from the inquiry itself. As such, you will stay aware of your finances and, therefore, have no surprises when making a significant decision, such as applying for a mortgage.

Hard Inquiries: When Does Checking Your Credit Score Affect It?

A hard inquiry is different. This occurs when a financial institution or lender checks your credit to determine your eligibility for a loan or credit. When you apply for a credit card, mortgage, or auto loan, they will likely perform a hard inquiry to see how risky it would be to lend to you.

Unlike soft inquiries, hard inquiries can lower your credit score slightly, typically by a few points. While the impact is usually minor, it’s not something you want to happen frequently. Each time you apply for new credit, a hard inquiry is recorded on your credit report, which could affect how lenders view your risk. If you have several hard inquiries in a short period, it might signal to lenders that you're having trouble managing credit or that you're taking on too much new debt.

However, the impact of a hard inquiry is usually short-lived. Most credit scores will only take a small hit, and the effect wears off after a few months. Additionally, if you're shopping for a loan, like a mortgage or a car loan, the credit bureaus allow you to rate shop within a 30-day period without multiple hard inquiries harming your score too much. This means you can check with several lenders for the best rates, and as long as they occur within that window, it will count as one inquiry.

How Often Should You Check Your Credit Score?

Even though checking your credit score doesn't affect it, it's still important to know how often to do so. The general recommendation is to check your credit score regularly—at least once a year. This helps you stay on top of any changes or discrepancies that could impact your credit health. It's also a good way to spot any potential signs of identity theft, as fraudulent activity can sometimes appear on your credit report before you notice anything unusual.

In addition to annual checks, many people choose to monitor their score more frequently, especially if they are planning a big financial move, like buying a home or car. By monitoring it monthly or quarterly, you can ensure everything is in order and address any issues early.

You can check your credit score through a variety of free services, including credit bureaus like Experian, Equifax, and TransUnion, or other online platforms. Many credit card companies also offer free access to your score as part of their services.

Can Checking Your Credit Score Too Often Hurt It?

While checking your credit score frequently won’t hurt it, you might be wondering if checking it too often could have any negative effects. Fortunately, the answer is no. There’s no such thing as checking your credit score “too often” when it comes to soft inquiries.

However, if you’re constantly applying for new credit and undergoing hard inquiries, this can have a negative effect on your credit score. The key is to balance staying informed with being mindful of how often you apply for new credit. If you’re applying for multiple loans or credit cards in a short period, it might be worth slowing down and focusing on improving your credit before applying again.

Remember, it’s the hard inquiries that can harm your credit score, not the frequency with which you check it yourself.

Wrapping It Up!

To sum it up, checking your credit score does not lower it as long as you are conducting a soft inquiry, which happens when you check your score or receive promotional offers. Hard inquiries, which occur when you apply for credit, can affect your score, but the impact is usually minimal and temporary. The key takeaway is that monitoring your score regularly is a good habit, especially when you're planning major financial decisions. By doing so, you stay informed, spot any potential issues, and can work towards improving your credit health over time without worrying about lowering your score.