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If you check your credit score yourself, it doesn’t lower it. But if a lender or credit card issuer does, it might. That’s because there are two types of credit inquiries — a hard inquiry and a soft inquiry — and each has a different effect on your credit.
Here’s what you need to know about both.
Hard vs. soft inquiries
A “soft inquiry” or “soft pull” occurs when you — or a creditor looking to preapprove you for a loan or credit card — checks your score. A soft inquiry has no effect on your credit score.
On the other hand, “hard inquiries,” also called “hard pulls,” are the kind that can cost you points. They happen when someone pulls your credit for the purpose of deciding whether to extend credit (or additional credit) to you. These hard inquiries should not happen without your knowledge or consent.
A hard inquiry stays on your credit report for two years, but any effect on your credit score fades sooner than that.
A hard inquiry might cost you up to five points according to FICO, the creator of the most widely used scoring formulas. With VantageScore, an increasingly popular credit scoring model, a hard inquiry is likely to cost even more.
So, if you apply for several credit cards close together, you might see a significant drop in your credit scores. Before you begin applying, take time to conduct research on the best credit cards for your specific financial needs, while keeping eligibility requirements in mind.
The same is true for loans. You’ll want to research banks and other lenders to compare rates and requirements. Getting pre-qualified is another way to preview rates without harming your score.
Checking your credit reports for inquiries
To check to see who has conducted a hard or soft inquiry, request free copies of your credit reports from the three major credit bureaus: Equifax, Experian and TransUnion.
There’s an entire section of your credit reports devoted to naming companies who have done a hard or soft pull on your credit. You'll see an "inquiry" on your credit report with a lender's name next to it — that's who pulled your credit — and the date they made the inquiry.
If you have applied for credit, you’re likely to see the lenders or card issuers listed on your report. You may also see collection agencies, lenders to whom you have not applied and records of when you checked your own credit.
You can review your hard inquiries on NerdWallet’s free credit report summary, which updates weekly. You can also check your free weekly credit reports at AnnualCreditReport.com to see who has looked at it in the past two years.
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Why checking your credit is smart
Checking your credit scores regularly can help you catch problems early and ways to push your score into the good and excellent ranges. A sudden, unexplained drop in your score could be your first indication of identity theft or a mistake in your credit reports. In either case, you’ll want to act quickly to dispute the wrong information on your credit reports.
It's also smart to check your scores before applying for credit. That way, you'll know what the lenders or credit card issuers are likely to see when evaluating your application and can avoid applying for products you probably won't qualify for — which helps protect your score from unnecessary hits.
Also, knowing where you stand gives you the chance to improve your credit before submitting an application, boosting your odds of approval and potentially getting better terms.
» NEXT: What’s a good credit score? Find out how to get one
How to make credit score checks more useful
Keep these items in mind when you check your credit score:
- There are many kinds of credit scores, often with several versions. When you monitor your credit score, be sure to use the same credit score and the same version of it each time. Otherwise, you’re comparing apples and oranges. Credit scoring models use the set of factors, but they may weight them differently and may use different scales.
- You don’t need to buy credit monitoring or identity theft protection to see your scores. You have several ways to get your score for free. They may come with a credit card or you can get a free credit score from NerdWallet, which updates weekly.
In an age where data breaches and identity theft are common, checking your score regularly is just good credit habit.
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