Will checking my credit score lower it?
One of the most common misconceptions about credit scores is whether or not checking them will have a negative impact on them. Many people are worried that regularly checking their credit score could lead to a decrease in their creditworthiness. In this article, we will explore this question and provide you with the facts to help you understand the relationship between checking your credit score and its potential impact on your creditworthiness.
Understanding Credit Scores
Before we delve into the impact of checking your credit score, it’s essential to understand what a credit score is. A credit score is a numerical representation of your creditworthiness, based on your credit history. It is used by lenders to assess the risk of lending you money and determine the interest rates and terms you will receive. Credit scores typically range from 300 to 850, with higher scores indicating lower risk.
The Myths and Facts
The myth that checking your credit score will lower it is rooted in the way credit scores are calculated. When you apply for a new line of credit, such as a loan or credit card, the lender will perform a hard inquiry on your credit report, which can temporarily lower your score. However, checking your own credit score does not count as a hard inquiry and will not affect your credit score.
Soft Inquiries vs. Hard Inquiries
There are two types of inquiries: soft inquiries and hard inquiries. Soft inquiries occur when you check your credit score or when a lender checks your credit score to pre-approve you for a credit card or loan. These inquiries do not affect your credit score. On the other hand, hard inquiries occur when you apply for a new line of credit, and they can temporarily lower your score.
Regularly Checking Your Credit Score
Now that we know that checking your credit score does not lower it, it’s essential to understand the benefits of regularly monitoring your credit. Regularly checking your credit score can help you:
1. Identify errors or discrepancies in your credit report.
2. Keep an eye on your creditworthiness and identify potential risks.
3. Make informed financial decisions by understanding your creditworthiness.
Conclusion
In conclusion, checking your credit score will not lower it. Regularly monitoring your credit score is a beneficial practice that can help you maintain good credit and make informed financial decisions. Remember to differentiate between soft inquiries and hard inquiries, as only hard inquiries can temporarily lower your credit score. Keep an eye on your credit report, and don’t hesitate to check your credit score to ensure it accurately reflects your creditworthiness.
