Your credit score plays a crucial role in your financial life, influencing your ability to secure loans and credit from banks and lenders. Typically, a credit score above 670 is considered good, making you a preferred borrower for financial institutions. Checking your credit score is a simple and non-damaging process that can provide valuable insights into your financial standing.
Can Checking Your Credit Score Hurt It?
Checking your credit score personally, known as a soft inquiry, has no negative impact on your score. Whether you check it or a potential lender does, your credit score remains unaffected as long as it’s not a result of a credit application. On the other hand, when a lender conducts a credit check as part of your application, known as a hard inquiry, it may slightly lower your score temporarily. Hard inquiries are listed on your credit report for about two years.
It’s vital to note that you are entitled to a free credit report annually from each of the major credit bureaus. You can access these reports at AnnualCreditReport.com. Additionally, you can request a free credit report within 60 days of receiving a notice of being denied credit. While credit reports form the basis of your credit score, they do not include the score itself.
Tools You Can Use to Check Your Credit Score
Various services and tools are available for checking your credit score:
- Many banks and credit card issuers provide free credit scores to their customers.
- Free credit score websites offer access to credit scores, with some also providing monitoring services for a fee.
Soft Inquiries vs. Hard Inquiries
Soft inquiries have no impact on your credit score, while hard inquiries, triggered by credit applications, may cause a slight decrease in your score temporarily. Examples of soft inquiries include checking your own credit, current creditors checking your credit, and auto insurers evaluating your credit. On the other hand, hard inquiries occur when applying for new credit or requesting credit line increases.
How Often Does a Credit Score Change?
Credit scores can change daily based on various factors such as payments, account balances, new credit inquiries, and debt fluctuations. Typically, credit reports are updated monthly.
Where Are Credit Inquiries Reported?
Credit inquiries are recorded in the credit reports maintained by major bureaus like Equifax, Experian, and TransUnion. Lenders refer to these reports to assess your credit history and financial reliability.
What Is a Good Credit Score?
Credit-scoring companies use different systems to evaluate credit scores, with a FICO score of 670 to 739 generally classified as “good.” Scores can range from 300 to 850, with lower scores considered poor and higher scores falling into the very good or exceptional categories.
The Bottom Line
Monitoring your credit score regularly without affecting it is crucial for understanding your financial standing and building creditworthiness. Utilize free tools available to stay informed about your credit score and take proactive financial steps.