Credit Here, Inquire Within
Can checking your credit hurt your score? What’s the difference between soft and hard inquiries? Kansas City Credit Union is here with the answers to all your frequently asked credit inquiry questions!
What is a Credit Inquiry?
A credit inquiry can also be called a credit check! When someone requests to look at your credit score, the credit bureau keeps a record of who has checked your credit report and when. Each of these requests to view your credit score is called a credit inquiry.
Credit inquiries come in two types: hard and soft. Soft credit inquiries are generally harmless and will not lower your credit score. Examples of soft credit checks include recorded requests like if you check your own credit or if one of your current creditors checks your score. A soft inquiry can also happen if a company checks your credit score to know if you qualify for preapproval offers. Only you and the credit bureau can view the record of soft inquiries.
Hard credit inquiries on the other hand are a bit more complicated. A hard inquiry is connected to credit risk and can actually lower your score. This type of credit inquiry is involved when you apply for credit like a mortgage, a loan, or a new credit card.
Quick note for the conscientious consumers out rate shopping for a loan: applications for the same kind of loan will only count as one hard inquiry on your report as long as they are within a certain time span, according to a U.S. News article on credit inquiries. Depending on the credit bureau, that time span can fall between a14 to 45 day window.
Will Checking My Credit Hurt My Score?
Simply put, no. Understanding soft versus hard credit inquiries will give you better insight into understanding what types of credit checks can hurt your score. Put your mind at ease – checking your own credit will not lower your score. In fact, you not only can but should check your own credit throughout the year!
Why Do Some Credit Checks Lower My Credit Score?
This all comes back to the difference between hard and soft credit inquiries. Soft inquiries (like checking your own score) will not hurt your credit score in any way. However, a hard credit check can damage your score since it implies credit risk.
When you apply for a mortgage or a new credit card, you are asking for more credit; this indicates risk since you could potentially get in over your head. For this reason, experts recommend limiting hard credit inquiries to two per year.
Not to worry, though. If you’re trying to establish credit, it might be a good idea to temporarily lower your score with a hard credit check for the opportunity to build credit history responsibly.
The Takeaway on Credit Inquiries
- DO check your credit score; it’s important to make sure your credit is up to date and accurate.
- DO limit the amount of hard credit checks you allow each year
- DON’T be afraid to apply for a loan that you can responsibly take care of
To learn more about credit inquiries or to speak with an agent, contact Kansas City Credit Union today! We can’t wait to help guide you on your path to financial freedom!