Check Your Own Credit Often
If youre wondering whether its okay to check your own credit, the answer is yes. Checking your own credit will not affect your scores and its important to review your credit reports and scores from all three credit bureaus TransUnion®, Equifax® and Experian® regularly for a variety of reasons.
First, monitoring your credit scores can alert you to any changes. For example, a sudden drop in your scores can indicate identity theft: Someone applied for credit in your name, used the credit and didnt make payments.
Or it could be that one of your creditors reported incorrect information to the credit bureaus, like accounts with an incorrect credit limit or current balance. Unfortunately, one in five consumers has an error on their credit report that makes them look like more of a credit risk than they are, according to the Federal Trade Commission.
Finally, you can check your credit scores periodically if youre trying to wipe out debt. Seeing your scores go up as you pay off debt can be a powerful motivator to keep working toward your goals of being debt free.
How To Access Your Report
You can request a free copy of your credit report from each of three major credit reporting agencies Equifax®, Experian®, and TransUnion® once each year at AnnualCreditReport.com or call toll-free 1-877-322-8228. Youre also entitled to see your credit report within 60 days of being denied credit, or if you are on welfare, unemployed, or your report is inaccurate.
Its a good idea to request a credit report from each of the three credit reporting agencies and to review them carefully, as each one may contain inconsistent information or inaccuracies. If you spot an error, request a dispute form from the agency within 30 days of receiving your report.
Track And Maximize Your Credit Score
Now that you no longer have to wonder if checking your credit score lowers it, you can stay more informed of your credit status. As you work your way toward that perfect score, remember that you do have some say in how your report looks. In fact, there are several factors that you control.
Avoid any credit missteps you can. Your score may drop with late and missed payments or when you allow your credit debt balances to grow. And closing an old account can also cause a dip in your score, as well as any bad marks on your credit report.
While your credit score doesnt give a full picture of your financial health, its a key piece to your overall money puzzle and creating a financial plan. Having a great credit score can really improve your life. This is especially true as you do things like rent an apartment or buy a house, or apply for a loan.
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Do Credit Checks Lower My Credit Score
Not every credit check will lower your credit score. Whether it will affect your score or not depends on why your score is being checked and whos doing the checking.
There are two types of credit checks:
- Soft inquiries: These are credit checks that are unrelated to you applying for credit. For instance, if you check your own credit, or if a creditor does so without getting your approval because theyre considering preapproving you for a credit card, itll be a soft inquiry. Soft inquiries dont affect your credit score.
- Hard inquiries: On the other hand, when you actively apply for credit or loans, your lender will run a different type of credit check on you called a hard inquiry. Hard inquiries usually knock a few points off your credit score.
People and companies need permission to check your credit
The Fair Credit Reporting Act regulates credit reporting and strictly prohibits the general public, including employers or landlords, from pulling your credit history without written permission. Businesses that wish to run a credit check on you without asking you first need a legitimate purpose to do so, such as preapproving you for a credit card. 1
Examples Of Hard And Soft Credit Inquiries
To see who has requested access to your credit, look for the section on your credit reports that lists the inquiries.
Heres a look at some examples of hard inquiries:
- Collection agency
- Lenders: when you want to borrow money
- Cell phone company: when you apply for a contract
Here are some examples of soft inquiries:
- Pre-approval offers for credit: you arent applying for credit
- Employment credit check
- Checking your own credit
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What To Do Before An Inquiry
Before you apply for any loan or a line of credit, ask the lender whether the credit check needed for approval will be a hard or soft inquiry. This will help you preemptively determine the effect on your credit score. Try keeping hard enquiries to a minimum as it could severely affect your score. However, some credit rating agencies can view multiple hard checks as rate shopping which could be grouped into one single hard credit check.
The best way to prepare for loan and credit applications is to make sure your credit score can handle the short-term decrease once a hard credit check is done. Soft checks can be done by yourself to keep track of your own credit report and can be useful to help you prepare too.
An Easy Way To Get Your Credit Report
The three major credit reporting bureaus, TransUnion, Equifax, and Experian, are required to give you a free credit report once a year by federal law. You have to apply for your reports through AnnualCreditReport.com.
While these reports are handy to see what lenders have reported to the credit reporting agencies and find inaccuracies to correct and improve your credit they do not include your actual credit score.
Since you need to know your credit score to get an idea of where you stand when applying for credit, the reports lack of a credit score is problematic. The reporting agency provided a less than an adequate solution offering to sell you your score for a steep price.
In 2007, Credit Karma came on the scene with a better option. They partnered with Equifax and TransUnion to give members ongoing access to their credit reports and credit scores.
Instead of having to wait once a year to check your reports or being price gouged to get your actual credit score, you could sign up for Credit Karma and get what you needed. This is how Credit Karma works and one of its best features.
So, to be crystal clear the company offers a free service where youll have access to your credit profile.
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Can Other People Check My Credit Score Without It Lowering
Heres where things get a little complicated. When other people access your credit report, it is known as a credit check. There are two types of credit checks:
A soft credit check will not lower your credit score. Sometimes lenders offer soft credit checks to see if you pre-qualify for financing. It is not a formal process by any means, but it gives lenders a rough idea of your financial history. If they like what they see, theyll recommend that you formally apply with them.
You often wont even know a soft inquiry has taken place. Have you ever gotten a credit card offer in the mail? The reason you did is because the credit card company did a soft credit pull.
A hard credit inquiry, on the other hand, does lower your credit score. When you ask, Does checking your credit score lower it, this is when the answer to that question is yes.
Also known as a hard pull, a hard credit inquiry occurs whenever you apply for credit. You should have an inquiry on your report every time you apply for a:
How Does Checking Your Credit Score Lower It
Are you wondering, “Does checking my credit score lower it?” No, not in most cases. Soft inquirieslike when you want to keep tabs on your own score or background checksshould NOT affect your credit score.
Its the hard inquiries that will temporarily lower your score. These hard pulls are a necessary sacrifice when youre ready to make a big financial decision, like a loan or new line of credit. Dont be afraid to ask the person or business youre working with if their check will be classified as a hard or soft credit inquiry so that you can plan accordingly.
The United States has three major credit bureaus. These are Equifax, Transunion, and Experianwhich aggregate data from many sources into a single report. You can also check your report before any major loans to make sure youre in good shape before a hard inquiry comes your way.
If you want, you can also get a free credit report from annualcreditreport.com. But why does checking your credit score lower it? As you now know, checking out your free credit score won’t affect your finances, it’s just the hard inquiries.
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Should You Also Check Your Credit Report
Checking your credit score is entirely different than checking your credit report. Your credit score is a numeric representation of your overall credit health, yet your credit report is the place where all the information about your credit accounts, your payments and your overall credit usage is listed.
While your credit report wont list your credit score, there are still plenty of reasons to keep an eagle eye on the information it includes. Your credit report is the first place where fraudulent accounts opened in your name will show up. This is one of the reasons many experts suggest checking your credit reports on a semiannual basis, as its one of the best ways to spot the early signs of identity theft.
Not only that, but your credit report can have mistakes or misinformation that could ultimately hurt your credit score, since the information on your credit report is used to calculate your score. Its a fairly straightforward process to dispute incorrect information that appears on your credit report, but youll only know whats there if you take the time to look.
Fortunately, when it comes to checking your credit report, you can do so for free and with no harm to your score at annualcreditreport.com. This website, which is the only site authorized by federal law, normally lets you check your Experian, Equifax and TransUnion credit reports once a year at no charge. But right now, through the end of 2022, you can check your reports for free as often as once a week.
How Do You Remove Inquiries
One way is to go directly to the creditor by sending them a certified letter in the mail. In your letter, be sure to point out which inquiry were not authorized, and then request that those inquiries be removed. You could also contact the 3 big credit bureaus where the unauthorized inquiry has shown up.
How To Check Your Credit Score Without Lowering It
Weve already seen that soft inquiries wont lower your credit score, but in case you still have some doubts about how to check your credit score safely, its time to put your mind at rest.
There are plenty of places you can get a free credit score without facing a hard pull. One great way is to go directly to a bank or credit card issuer. Many of them provide soft inquiries and scores for free. For example, Discover, which uses FICO scores, gives anyone a free credit scorecard you dont even need to be a customer to use the service.
Another popular website is annualcreditreport.com, which gives users a free credit report from each credit bureau every year. Although it wont give you the score itself, a credit report provides crucial information about the factors that contribute to your score and can therefore give you insight into how to improve your score. This can be a good one to check out once youve found out your score.
Generally, you dont need to pay to see your credit score, though some companies do charge. These companies may give you a more precise score, but the free options will suffice in most cases.
As for the hard pulls, unfortunately its inevitable that your credit score will decrease slightly. However, its not the end of the world.
How To Dispute Hard Inquiries
If theres an incorrect, outdated or unverifiable item on your credit report, you may be able to file a dispute with the credit bureau or the company that sent the information to the bureau and get it removed. Disputing items that are hurting your credit scores could be one way to quickly increase your scores.
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Improve Your Credit Score
Hard inquiries are just one factor used to calculate your credit score. Other factors, like how well you manage your repayments, how much debt you have and what type of debt, as well as how long youve been using credit, have a far more significant impact on your credit score.
At Max Loans, we believe everyone deserves a second chance. Thats why we assist customers with bad credit loans to help boost their credit score back to good health. Even if youve defaulted in the past, you may be eligible for finance. If you find yourself in this situation, contact Max Loans today to find out how we can assist you with a bad credit loan to meet your financial needs and improve your credit score!
How Long Hard Inquiries Stay On Your Credit Reports
Hard inquiries can stay on your credit reports for just over two years, but their impact to your credit scores weakens over time.
Soft inquiries, which arent considered as being related to opening new credit, are only visible to you. The only exception is that insurance companies can sometimes see inquiries from other insurance companies. Soft inquiries have zero impact on your credit scores.
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A Lowered Credit Score Depends On Many Factors
So now you know, does checking your credit score lower it? It depends on the type of inquiry. Hard inquiries may lower your credit score, while soft inquiries generally do not.
Having a higher score can mean better terms on new loans, mortgages, and credit cards. These things on their own dont add much value to your life, but theyre tools you can leverage to reach your goals. So it’s important to try to keep your score high.
If you are working towards a higher credit score, don’t give up! Remember to be mindful of inquiries and check your own score on occasion. Your hard work will pay off and you’ll soon discover the benefits of having great credit.
Manage Money And Keep A Budget
Mint offers tools for tracking all your spending and for setting budgets. It suggests budgets in different categories based on your spending history. With Mint, you can carefully classify all transactions. For example, if you have dinner at a hotel restaurant, the charge will likely be categorized automatically as âhotelâ or even âtravel.â With Mint, you can change it to ârestaurant.â When you appropriately classify all your transactions, it becomes really easy to see where and how you spend your money and then set limits on certain categories of spending to meet financial goals.
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How Do Hard Searches Affect Your Credit Score
Unlike soft searches, hard searches are visible on your credit report. That means that if you make an application with a lender today, and then another one next week, the second lender will see that you have already applied for credit very recently. They can not see if you were rejected for this first application. However, lots of applications in a short space of time may set alarm bells ringing the suggestion being that you either keep getting rejected or you are perhaps in financial difficulty.
The footprint left by hard searches will lower your credit score and is visible on your credit report for around 6 months. An excessive amount of these searches will lower your score more, and make it harder to recover. The key here is to only apply for credit when you need to and space your applications apart. A lower credit score could see you being rejected when you apply or being charged a higher rate of interest.
Why You Should Check Your Credit Score
Your credit score reveals your creditworthiness, or, in other words, tells a lender how much of a risk they are taking if you are the borrower. With this in mind, the higher your number, the less of a risk you are. This, in turn, makes you more eligible to receive approval for a policy, loan, or service.
Checking your score often can help you know your overall financial health, and steer you to make knowledgeable financial and credit decisions. In doing this, youll also be able to understand what types of things affect your score, and learn how to avoid potential drops in your score.
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Get It Free From Your Bank Credit Card Issuer Or Experian
If you have a major credit card, odds are the card issuer already gives you free access to your credit score in their app, on your monthly statement, and/or through a credit education tool. Experian also offers FICO scores to those who sign up for a free Experian account.
The following card issuers currently offer free credit scores to eligible customers:
- American Express
- Bank of America
- Barclaycard U.S.
Find out other ways to get a free credit score.