Does checking your credit score make it worse? This is a common question that many people have, especially when they are considering applying for a loan or credit card. The answer, however, is not as straightforward as it may seem. In this article, we will explore the impact of checking your credit score and whether it can negatively affect your creditworthiness.
Firstly, it is important to understand that there are two types of credit inquiries: hard inquiries and soft inquiries. Hard inquiries occur when you apply for credit, such as a loan or credit card, and the lender checks your credit score. 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.
Checking your own credit score, also known as a soft inquiry, does not typically have a negative impact on your credit score. In fact, it can be beneficial to regularly check your score to monitor your credit health and identify any errors or discrepancies that may be affecting your score. By doing so, you can take steps to correct these issues before they have a significant impact on your creditworthiness.
However, hard inquiries can have a temporary negative effect on your credit score. When a lender performs a hard inquiry, it is recorded on your credit report and can lower your score by a few points. This is because hard inquiries indicate that you are actively seeking new credit, which may be seen as a sign of financial stress or potential risk by lenders.
It is important to note that the impact of a hard inquiry is generally short-lived. The effect on your credit score typically fades after a few months, and the score will eventually return to its pre-inquiry level. Therefore, if you are planning to apply for multiple loans or credit cards within a short period of time, it is advisable to space out your applications to minimize the impact of hard inquiries.
In conclusion, checking your credit score does not make it worse, but applying for multiple loans or credit cards in a short period of time can have a negative impact. Regularly monitoring your credit score and being mindful of the number of hard inquiries you have can help you maintain a healthy credit score and improve your chances of being approved for future credit applications.
