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- Checking your credit score and your credit report will not impact your credit score.
- Hard inquiries pulled by a creditor will impact your credit score, but soft inquiries will not.
- Credit monitoring and identity theft protection services can monitor your credit for you.
Your credit score is key in qualifying for a credit card, loan, or apartment rental. Your credit score will also determine the interest rates applied to money you borrow, potentially saving or costing you thousands of dollars.
With so much at stake, it's understandable that you'd want to keep tabs on changes in your credit score to monitor how you're doing. Checking your credit score can also assist you in catching instances of identity theft faster — many of the best identity theft protection services offer credit monitoring capabilities.
You may not be closely monitoring your credit score for fear that checking it will lower your score. Rest assured that this is not the case. Checking your credit score will not lower it. Mark Haywood, a wealth management advisor at Northwestern Mutual, says, "there are no penalties associated with checking your own credit score, and you can check it as often as you'd like."
Understanding credit score checks
Checking your own credit score does not hurt it. This becomes clear when we understand the purpose of credit scores.
Credit scores are reflections of specific information on your credit reports. They signal to potential lenders our risk level as a borrower and whether we'll pay back our debts; the higher the credit score, the more likely we are to pay out debts on time. There is no reason why checking our credit scores would increase the risk that we would miss a debt payment.
Credit scoring algorithms like FICO and VantageScore calculate our credit scores by looking at factors on our reports, such as payment history, credit balances, and length of credit history. Your credit reports do not contain any information on how many times you checked your credit score.
When should you check your credit score?
As we've established, you can check your credit score as many times as you want whenever you want. That said, Haywood recommends creating a designated time to check your credit instead of a haphazard approach. "By scheduling a set time, you can ensure consistency – and building or maintaining a good credit score remains a top financial priority," he says.
This may be when you make monthly credit card payments, as many credit card companies show you your credit score. There are many apps that can do this for you and notify you of any changes to your credit score. Some of the best credit monitoring services are even free.
You could also lump checking your credit score into a larger monthly session where you go over all your finances. "You can use part of this time to check your credit score, review your credit/debit card statements, make any necessary adjustments to your budget, and reevaluate your financial goals," Haywood says.
Checking your score frequently may also be necessary if you're actively working to improve your credit or planning to take out additional credit in the next 24 months, such as an auto loan or a mortgage. If neither of these situations applies to you, Taylor Kovar, CEO and founder at Kovar Wealth, says that checking your score two to four times a year is probably sufficient.
Does checking your credit report hurt credit?
Keeping tabs on your own credit doesn't hurt your credit. This goes for checking both your credit score and your credit report.
However, a third party may pull your credit file, which will affect your credit score. Inquiries on your credit report come in two forms: soft inquiries and hard inquiries.
Soft inquiries are any inquiries on your credit report that aren't credit-related. They have no bearing on your credit score.
While the credit report owner can pull soft inquiries, that privilege also extends to third parties checking your credit report for reasons unrelated to credit. They can be pulled for employment applications, insurance risk assessments, and even apartment rentals decisions. They can also be pulled by credit companies appraising you for pre-approved offers.
On the other hand, hard inquiries trigger when you apply for new lines of credit. These will impact your credit. "When a lender runs your credit, it can impact your score by around five points," says Melissa Cohn, regional vice president at William Raveis Mortgage.
Hard inquiries lower your credit score because someone who has just taken out a new loan will be riskier than someone who hasn't. While one inquiry drops your credit score by a few points, multiple hard inquiries will have a more significant impact because multiple new lines of credit signal that you may be having trouble with money management.
One exception to this rule is if you're rate shopping while applying for a loan, meaning you're applying for multiple loans to see which lender offers the best rates. The credit scoring algorithms give you a 30-45 day window where all the resulting hard inquiries you racked up while shopping count as one.
The credit scoring algorithms stop including a hard inquiry into their calculations when they turn one year old. They fall off your credit report completely after two years.
What else lowers your credit score?
While too many hard inquiries will damage your score, there are other behaviors you should avoid if you want to build credit.
Missed payments: A missed payment can result in a delinquency on your credit report. Haywood says missed payments have the potential to damage your credit score. "This negative impact has the potential to grow the longer the bill remains unpaid and the higher the amount owed," he says.
Using too much credit: Your credit utilization ratio is the amount of credit you're currently using on your revolving credit accounts compared to your total available credit. "Your credit card balance should not exceed 30% of the available limit on a credit card," Haywood explains. That said, the lower your utilization ratio, the better.
Canceling credit cards: Canceling existing credit cards may seem like a good idea if you can't control your spending. However, if you eliminate a line of credit, that reduces the total available credit you have which makes it harder to keep your credit utilization down.
Kovar agrees that it's important to pay your bills on time and resist applying for new credit. He says it's important to remember that your credit score is a reflection of your "financial reputation, so if you are late paying people back, and always looking to borrow money from new people, your reputation will take a hit."
Credit score check frequently asked questions
Why are my credit scores different?
When you check your credit score across different platforms, you may notice that your credit scores vary slightly. This is because you have many different credit scores. The credit scoring algorithms FICO and VantageScore have multiple iterations of their scoring model that are still in use. They also have credit scores designed for specific industries like mortgages and auto loans.
These algorithms also calculate scores based on each of the three major credit reporting agencies — Equifax, Experian, and TransUnion. "It's important to be aware of the different types of credit scores available and the various ways they can be accessed," advises Kortney Ziegler, founder of WellMoney.
Who offers credit scores?
You can view your credit score through various methods, though your best bet is to go to your lenders to get your credit score or other financial institutions you're part of. You can also get your credit score by signing up for credit monitoring or identity theft services.
Should I pay for a credit score?
You should never pay to view your credit score. There are so many ways for you to check your credit score for free that there is no reason for you to pay for your credit score. Additionally, if a service is asking you to pay for your credit score, it is most likely a scam. "Only go through reputable sources such as your credit card company when checking your credit score," Kovar says.