Your credit score is central to your major financial decisions, from buying a home to starting a business. Lenders and other financial institutions rely on your creditworthiness, which is an analysis of your credit score, to determine how likely you are to repay your debts. Therefore, checking your credit score is key to understanding your financial well-being.
Checking your credit score is what’s known as a “soft credit check,” which means it doesn’t have any impact on your score. However, when you apply for a loan or credit card, financial institutions may perform a “hard credit check,” which could lower your score by a few points. Read on to learn more about the differences between a hard and soft credit inquiry and checking your credit score.
Key considerations
- Checking your own credit score is a “soft credit check,” which doesn’t impact your score.
- When you apply for a loan or credit card, a lender usually performs a “hard credit check,” which can lower your score.
- In most cases, it’s wise to avoid applying for multiple credit cards or loans in a short timeframe, as this may significantly impact your credit.
Soft credit checks don’t hurt your score
Soft credit checks, also known as “soft inquiries” or “soft credit pulls,” allow you or a lender to view your credit information without affecting your credit. A soft inquiry usually isn’t connected to an application for credit. While you can view soft credit inquiries on your credit report for up to two years, they aren’t visible to other prospective lenders and don’t impact your score.
Checking your own credit
Before you apply for anything that requires a credit check—including a personal loan, credit card, or mortgage—it’s generally a good idea to check your credit score. That way, you can make informed decisions and apply for offers that suit your circumstances. If necessary, you could also take steps to improve your score before applying for the loan, mortgage, or credit card you want. Even if you aren’t planning to open new accounts anytime soon, checking your credit score regularly helps you understand your financial standing clearly.
Viewing your own credit score shouldn’t have an impact on your credit. Equifax, Experian, and TransUnion offer free access to your credit score or paid access, which comes with additional features. You may also be able to look at your score through your lenders.
Other soft credit pulls
Soft credit pulls offer a snapshot of your credit history without affecting your creditworthiness. Whenever anyone views your credit report or score for any reason that doesn’t involve a credit application, they perform a soft credit pull. Lenders, businesses, and other entities don’t need permission to conduct soft credit inquiries because they don’t affect your credit score.
Common examples of soft credit pulls include credit checks by potential employers during the hiring process, as part of apartment applications, for pre-approved credit card offers, for personal credit monitoring, and as part of routine checks by lenders.
When does checking your credit score lower it?
Lenders typically run a hard credit check when you apply for a loan or credit card. A hard credit check gives lenders insight into your credit history, including your credit score. Hard credit inquiries typically impact your credit score.
New credit accounts for about 10% of your FICO score*. Each new loan or credit card application may temporarily reduce your score by a few points. If you only complete one application, your credit typically recovers quickly. However, multiple hard credit checks within a short timeframe may do more severe damage. That’s because seeking multiple loans or credit cards at once could appear as a lack of financial stability to some lenders.
To avoid damaging your credit score, you may request prequalification from your lenders. Prequalification shows you what offers you may qualify for based on your credit history. The difference between preapproval and prequalification is that the prequalification process only requires a soft inquiry, so it won’t hurt your credit.
There are some exceptions—when it comes to mortgages, for example, it’s important to compare offers so you don’t miss out on the best rates. Therefore, credit scoring agencies treat multiple mortgage inquiries within a certain timeframe as one loan application.
Apply for a BHG Financial personal loan without hurting your credit1
BHG Financial makes finding the right personal loan quick and easy. With no initial hard credit inquiry, applying doesn’t impact your credit score.1 We offer personal loans up to $200,0002 without unnecessary paperwork. You could get your funding decision quickly and receive a lump sum in as few as five business days.3 Our dedicated team of experts will help you find the right financing tool for your unique circumstances and goals. Before applying, you can estimate your monthly payment with our payment estimator.
FAQs about checking your credit score
How do I check my credit score without hurting it?
Checking your own credit score doesn’t hurt it. You could check your score through the three major credit bureaus, your credit card issuer, a credit counselor, or a free credit score website, to name a few options.
Will credit monitoring hurt your credit score?
No, monitoring your credit score manually or through financial apps will not hurt your credit score. Only hard inquiries will have an impact on your score.
How much does a credit score decrease when it’s checked?
There’s no set in stone rule for how much a credit score drops after a hard inquiry, but the drop is usually between 5 and 10 points. ** Credit scores typically recover from a hard inquiry after just several months.
