No matter how you spin it or score it, credit can be as stressful as it is necessary. Those new to having a line of credit find themselves consumed by questions like “How can I check my credit score for free? Does checking your credit score lower it? Is checking your credit score bad? Should I worry about my credit score?”

To clarify the confusion, it’s important to first understand that credit checks can hurt your score. However, it is also important to understand how they do, and why you should be wary of them. 

Hard Inquiry

There are two types of credit inquiries: hard and soft. Hard credit inquiries (hard credit checks or pulls) will knock points off your score. financial institutions initiate them to making lending decisions such as extending credit or approving mortgages. These institutions should not initiate inquiries without your consent or knowledge.

Hard inquiries can cost you five points on your FICO score and 10-20 points with other scoring models. on top of that, they stay on your credit report for two years. 

That may not seem like much, but a few points can make a big difference in your interest rates. Hard credit pulls will drop your score, resulting in you paying out more money over the loan lifetime. 

Hard credit checks stay on your credit report for two years and hurt your score, so try to avoid them.

Soft Inquiry

Soft credit inquiries, on the other hand, have no effect on your credit score. They provide the same information as a hard credit check including debt management, credit and payment history, derogatory marks, and your credit score.

These “soft pulls” usually occur as part of a background check. They are initiated either by a creditor looking to pre-approve you for a credit card or loan, a company looking to hire you, or even when you check your own credit score. 

If you have a loan, lenders make account review inquiries. Those are also considered soft pulls so they don’t affect your score. Credit history checks done by insurance companies or employers are also disregarded in score calculation. 

Companies can pull soft inquiries without you knowing, so verify the type of check being made on your credit. You can then verify the accuracy of this information with the three credit bureaus. 

Other Best Practices 

So, does checking your credit score lower it? Is checking your credit score bad? Yes, if it is a hard check. Should I worry about my credit score? Yes, but there are ways to keep it from dropping, and best practices to keep you from stressing.

Shop Smarter

When looking for any sort of credit, limit your shopping time to around two weeks. Most scoring models will count all inquiries of the same type as one as long as they take place within a 14-day period of time. Shopping quickly can minimize the likelihood of your credit report being marked up, and your score taking a hit. 

Monitor Your Credit

As a safeguard and a fix for identity theft or fraud, regularly monitor your credit report and score. This will help you catch costly errors, report inaccuracies, and reconcile them. 

Before shopping for credit, check your credit score and report. Conduct research and apply only for the credit that you will likely qualify for. 

If there is a hard pull on your credit report with an unfamiliar initiator, check to see if it’s a promotional inquiry. You don’t need to worry about promotional inquiries, they usually mean you were sent a pre-approved credit offer. If it’s not a promotional inquiry, however, the contact information for the company that ran the check is often provided. If not, you can request the information from the credit reporting agency and work together with the company to resolve the error. You can avoid this by opting out of pre-approved offers through the Federal Trade Commission website.

Look at all of the inquiries–hard and soft–made on your credit report in order to see who is pulling your credit and if there are any unauthorized accounts. 

Always Use the Same Credit Score 

With the variety of credit scores available and the different versions of each, it is vital to use the same score and version each time when monitoring it. If one scoring model weighs or measures differently than another, comparing scores from each would prove ineffectual in your efforts. 

Conclusion

In all the perplexity and uncertainty of credit scores, this much is true: for exceptional credit hygiene, hard credit checks should be avoided and best practices implemented. Check out Lift Credit for installment loans at great rates regardless of your credit standing, no FICO credit check required.