Does checking your credit score make it go down? This is a common question among many individuals who are trying to manage their finances and understand the intricacies of credit scoring. The answer to this question can be a bit nuanced, as it depends on the type of credit check being performed. Let’s delve into the details to clarify this confusion.
Firstly, it’s important to differentiate between two types of credit inquiries: hard inquiries and soft inquiries. Hard inquiries occur when you apply for a new line of credit, such as a mortgage, car loan, or credit card. On the other hand, soft inquiries are when a lender checks your credit score without you applying for credit, such as when you check your own score or when a lender pre-approves you for a credit card.
When you check your own credit score, it is considered a soft inquiry and will not affect your credit score. This is because the credit scoring models are designed to differentiate between hard inquiries and soft inquiries. Therefore, the act of checking your credit score does not make it go down. In fact, it can be beneficial to check your credit score regularly to monitor your financial health and catch any errors or fraudulent activity.
However, hard inquiries can have a temporary impact on your credit score. When you apply for new credit, the lender will perform a hard inquiry on your credit report. This can cause your credit score to drop by a few points, but this effect is usually short-lived. The credit scoring models understand that applying for new credit is a common financial activity and do not penalize you for doing so. The impact of a hard inquiry fades over time, and your credit score will eventually recover.
It’s important to note that the frequency of hard inquiries can have a more significant impact on your credit score. Multiple hard inquiries within a short period of time can raise red flags to lenders, as it may suggest that you are credit-hungry or struggling to manage your finances. To minimize the impact of hard inquiries, it’s advisable to space out your credit applications and avoid applying for multiple new lines of credit simultaneously.
In conclusion, checking your credit score does not make it go down, as it is considered a soft inquiry. However, hard inquiries can temporarily affect your credit score when you apply for new credit. By understanding the difference between hard and soft inquiries and managing your credit applications wisely, you can maintain a healthy credit score and take control of your financial future.
