Why Does Checking Your Credit Score Lower It?

If you’re like most people that live in the United States, you probably want to make sure that you keep your credit score as high as possible because most major purchases, whether you’re buying a home or financing a car, require you to have a good credit score. So, does checking your credit score and credit report lower your credit score? We will discuss this in much detail below.

Why Does Checking Your Credit Score Lower It?

Pulling a copy of your own credit report and checking it will never lower your credit score. Whenever a person checks his or her credit report, a soft inquiry (soft pull) is placed on their credit score. Soft inquiries do not lower your credit score. Only hard inquiries (hard pulls) lower your credit score. Hard inquiries are made when a bank or lender pulls your credit report and score to decide whether to offer you credit or lend you money. As such, checking your own credit report and credit score will never lower your credit score because only a soft inquiry is made.

Let’s discuss hard inquiries in more detail. A hard inquiry is usually placed on a person’s credit report when he applies for a new credit card, auto loan, home loan, or student loan. Hard inquiries remain on a person’s credit report for approximately 2 years.

Hard inquiries can potentially lower a person’s credit score by approximately 5 to 10 points. So, if your credit score matters to you, do not apply for too many loans or credit cards because the inquiries will add up and adding too many inquiries to your credit report within a short period of time can significantly lower your credit score.

Hard Inquiry vs Soft Inquiry

Let’s discuss the difference between hard inquiries and soft inquiries.

What is a Hard Inquiry

A hard inquiry, also known as a hard pull, is an inquiry that is placed on a person’s credit report when he applies for a loan or credit card at a financial institution, such as bank.

For example, if you apply for a credit card, auto loan, home loan, or student loan, a hard inquiry is placed on your credit report. Hard inquiries have the potential to lower your credit score anywhere from 5 to 10 points. Each inquiry will lower your credit score by a few points.

Hard inquiries stay on your credit report for 2 years. After the 2-year period, the inquiry will fall off your report and will no longer impact your credit score. The pitfall that many fall in is applying for too many credit cards or loans within a short period of time. Several hard inquiries can significantly lower your credit score, but one or two inquiries will not have that big of an impact on your score. Lenders and banks don’t like to see too many inquiries on a person’s credit report because it tells them that you’re short on cash and you’re becoming too reliant on credit. So, if you’re thinking about making a large purchase, such as buying a home or financing a car, limit the number of credit applications you make.

Examples of Hard Inquiries

Here are some examples of hard inquiries:

  • Applying for a credit card
  • Applying for a home loan
  • Applying for an auto loan
  • Applying for a student loan
  • Applying for a person or business loan

What is a Soft Inquiry?

A soft inquiry, also known as a soft pull, is an inquiry that is placed in a person’s credit report, but it does not impact the person’s credit score. For example, if you check your own credit, a bank checks your credit to preapprove you for a credit card or loan, or when an employer runs a credit check with your permission, a soft inquiry is usually placed on your credit report. Soft inquiries do not lower your credit score because the inquirer is not checking your credit report to lend you money or approve you for credit. As such, they do not count against you, so check your credit report and your credit score as many times as you want because checking will not lower your credit score.

Examples of Soft Inquiries

Here are some common examples of soft inquiries:

  • Checking your own credit score
  • A bank pre-approving you for a credit card
  • Your employer conducting a background check
  • Your landlord checking your background

What Else Can Lower Your Credit Score?

There are a variety of things other than hard inquiries that can lower your credit score. Here are some of those things:

Not Making Payments on Time

Your payment history accounts for 35% of your credit score, so not making payments on time can significantly lower your credit score. To improve your credit, you should make timely payments on your credit cards and loans.

High Credit Utilization

Utilizing more than 30% of your available credit can lower your credit score. It is agreed in the credit community that keeping your total credit utilization below 30% will help you improve your credit score.

Too Many Hard Inquiries

Although a single hard inquiry typically lowers your credit score by approximately 5 points, racking up too many hard inquiries within a short period of time can significantly lower your credit score. So, space out the amount of time between your credit and loan applications so that your credit report does not accumulate too many hard inquiries.

Short Length of Credit History

A short credit history will lower your credit score. Unfortunately, the only thing you can do to improve this factor is to keep your accounts open for as long as possible. If you have an account that is old, don’t close it down because closing it could reduce your overall account age and lower your credit score.

Check Your Credit for Inaccuracies

Now that you know that checking your credit score does not lower it, you should often check your credit report to know where you stand. If you find any inaccuracies on your credit report, such as a collection account that does not belong to you, you should immediately file a dispute with the credit reporting bureau showing the account. Or, you can contact the collection agency that reported the account to the credit bureaus and ask them to remove it because it does not belong to you. Also, if you find any hard inquiries that you did not make, you should also dispute them to have them removed from your credit report. Once an inaccurate item is removed, you may see a substantial bump in your credit score.

How Often Should You Check Your Credit Score?

A good rule of thumb is to check your credit score once a month. However, if you’ve had your identity stolen or you’re planning to make a big purchase, such as buying a home or financing a car, you should check your score more often to ensure that nothing negative is showing up on your credit report to lower your credit score. Here is more information on how often should you check your credit score. That said, regardless of how often you choose to check your credit score, you should know that you can check your credit score as often as you want without impacting your credit score.

Credit Score Planet Frequently Asked Questions

1) Can I check my own credit score without affecting it?

Yes, checking your own credit report to view your credit score will not affect your credit score, nor will it lower it. This is so because checking your own credit score does not result in a hard inquiry and only hard inquiries will lower your credit score.

2) Is it bad to check your credit on Credit Karma?

No, there is nothing wrong with checking your credit report and score using Credit Karma.

3) How can I check my credit score without penalty?

Checking your own credit score will never result in a penalty. You can check your credit report and score on a daily basis if you want to without having any impact on your credit score.

Does Checking Your Credit Score Lower It?

No. Checking your credit score will not lower it because when you check your credit score, a soft inquiry is placed on your report, and soft inquiries have no impact on your credit score. If you have any general questions or comments, please feel free to leave them in the comments section below.