By Tracy Grier | The Wealthy Place Enterprises LLC
You want to look at your credit report, but you pause because someone once told you that every credit check lowers your score.
Wealthy family, checking your own credit report does not hurt your credit scores. The confusion comes from treating every credit check as though it were the same.
Soft inquiries do not affect credit scores
A credit inquiry is a request to view a credit report. A soft inquiry happens when the review is not connected to your application for new credit. Your own request for your credit report is a soft inquiry. Reviews of an existing account and some prescreening activity can also be soft inquiries.
The Consumer Financial Protection Bureau says soft inquiries do not affect credit scores and are shown only to you on the report you request. CFPB: What is a credit inquiry?
You can review each of your three nationwide credit reports online for free every week through AnnualCreditReport.com. Looking at those reports is not an application for credit, so it does not lower your scores. CFPB: Requesting your own report
Hard inquiries usually follow an application
A hard inquiry generally occurs when a lender checks your report after you apply for a credit card or loan. Hard inquiries are visible to others who obtain your report and may affect a credit score because scoring models consider recent applications for credit.
That does not mean one inquiry guarantees a certain point loss, a denial, or lasting damage. The effect depends on the scoring model and the rest of the credit file. Rate-shopping treatment can also vary by model and loan type. For that reason, do not rely on a universal point estimate or assume every prequalification process is soft.
Ask before you submit
Before entering a Social Security number or pressing “apply,” ask:
- Is this only a prequalification, or is it a full application?
- Will you make a hard inquiry or a soft inquiry?
- Which credit-reporting company may receive the inquiry?
Save the answer, the date, and the name of the product in a private application log. This small habit helps you connect each hard inquiry with a decision you actually made.
If you do not recognize an inquiry
First, check whether the entry is a soft prescreening or account-review inquiry. A company name may also differ from the brand you recognize. If a hard inquiry still appears unfamiliar, contact the company listed and the credit-reporting company to ask for the inquiry's purpose and supporting information.
If reliable records show the inquiry is inaccurate, you may dispute that specific information for free. If the facts point to identity theft, use IdentityTheft.gov for a recovery plan. Do not file an identity-theft report simply because a name is unfamiliar.
Your free first step today is to check one report's inquiry section and label each entry “soft,” “hard and recognized,” or “needs research.” Keep account numbers and inquiry details private.
Understanding the type of inquiry turns a vague fear into a question you can answer.
General education only, not individualized financial or legal advice.
General education, not personalized financial, investment, tax, or legal advice. Credit results vary. Investing involves risk, including loss of principal.