If you’re concerned about your credit score, you may have heard that checking your credit can actually lower your score. Is this true? We’ll explore this question and help you understand how credit scores work.
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What is a credit score?
A credit score is a number that represents your creditworthiness – i.e. how likely you are to repay debt. It is used by lenders to decide whether to lend you money, and if so, at what interest rate.
Your credit score is calculated based on information in your credit report, which is a record of your borrowing and repayment history. The main factors that affect your credit score are:
-Payment history (35%) – Do you always pay your bills on time?
-Credit utilization (30%) – How much of your available credit are you using?
-Credit history length (15%) – How long have you been borrowing money?
-Credit mix (10%) – Do you have a mixture of different types of debt, such as credit cards, store cards, and loans?
-New credit (10%) – Have you applied for any new credit products recently?
Checking your own credit score will not lower it. In fact, it can be a good idea to check your score regularly so that you can spot any changes and take action if necessary. For example, if you see that your score has dropped suddenly, it could be an indication that you have been the victim of identity theft.
How is your credit score calculated?
Your credit score is calculated based on information in your credit report. This information is grouped into five categories:
1. Payment history (35%)
2. Credit utilization (30%)
3. Length of credit history (15%)
4. Credit mix (10%)
5. New credit inquiries (10%)
As you can see, your payment history has the biggest impact on your credit score, followed by your credit utilization. That’s why it’s so important to make all of your payments on time and keep your balances low.
What are the benefits of checking your credit score?
There are a few different benefits of checking your credit score on a regular basis. First, it can help you catch any errors or inaccuracies that may be affecting your score. This is important because even a small mistake can have a big impact on your score. Second, checking your credit score regularly can help you identify any potential red flags that might suggest identity theft or fraud. Finally, staying up-to-date on your credit score can help you make informed decisions about financial products and services.
Does checking your credit score actually lower it?
There’s a lot of conflicting information out there about whether or not checking your credit score will lower it. The short answer is no, checking your credit score will not lower it. In fact, you’re entitled to one free credit report from each of the three major credit reporting bureaus every year, and you can check your credit score as often as you like without affecting it.
There are a few things that can lower your credit score, however, such as late payments, high balances, and hard inquiries (which happen when you apply for new credit). So if you’re trying to raise your credit score, you should focus on these areas.
How often should you check your credit score?
Most people know that their credit score is important. This three-digit number is a key factor in determining whether you’re eligible for a loan and, if so, what interest rate you’ll pay. A high credit score saves you money in the form of lower interest rates, while a low credit score costs you money in the form of higher interest rates. That’s why it’s important to keep tabs on your credit score and work to improve it if necessary. Checking your own credit score doesn’t have any negative impact whatsoever.
How to check your credit score for free
One of the most common questions we get is whether checking your credit score will hurt it. The short answer is no. There are two types of inquiries that can be made on your credit report: hard and soft. Hard inquiries are made when you apply for new lines of credit and are typically made by creditors. These inquiries can stay on your credit report for up to two years, but only impact your score for the first year. Soft inquiries are made when you check your own credit score or when businesses check your score for marketing purposes. These inquiries don’t impact your score at all.