Does Checking Your Credit Score Lower it?

When you apply for a mortgage, auto loan, credit card or rental, you're likely to need a credit check. Sometimes you may even need multiple credit checks. For instance, when you're shopping around to find the lowest rates or get better lender fees. You're not alone in wondering whether these credit inquiries, or “credit pulls”, will hurt your credit score. The good news is that not all credit checks will impact your score, and some credit checks will only temporarily impact your score — giving your score time to recover.

When your credit is checked, you'll receive one of two types of credit pulls: a “soft inquiry” or a “hard inquiry.” A soft inquiry is most common when checking your own credit report, opening a new bank account, getting an insurance quote, or someone is requesting a background check on you. A hard inquiry is used when you apply for a credit card, auto loan, personal loan, mortgage, apartment or request a new credit limit. Here is how a hard and soft inquiry will affect your credit score:

Do soft inquiries affect credit score?

A "soft pull," or "soft inquiry," often happens without you ever knowing about it and doesn’t affect your credit score. Sometimes these types of inquiries are done without your permission, such as if you receive an unsolicited pre-approved credit card offer in the mail or when a prospective employer pulls your credit as part of a background check on you. Sometimes a soft pull happens when you check your own credit score. And if either of these two things have happened, they are classified as soft pulls, and will not chip away at your score.

Do hard inquiries affect credit score?

A “hard pull,” or "hard inquiry" on the other hand, can affect your score. When you’re shopping around for a mortgage, it’s not uncommon for you to speak with multiple lenders. And that means multiple requests for your credit report. This can be concerning, because with every “hard pull,” your score can be impacted — unless each pull happens within a specific window. Credit bureaus are aware that potential borrowers will “rate shop,” so you generally have between a 14- to 45-day window, depending on which credit bureau, where all pulls are consolidated and considered just one.

For the purposes of applying for a mortgage, you can almost guarantee the lender will do a hard pull of your credit report. This inquiry will stay on your credit report for two years but will only impact your score for one year. It can shave a few points off your score per inquiry so if you’re shopping around, it’s important to shop around in a set amount of time to avoid being penalized for each inquiry.

Even though these hard credit pulls will stay on your credit report for two years, lenders will be able to see from your report that you’re shopping around for a mortgage, so even if your score is a few points lower than you’d like thanks to a hard inquiry, lenders may take your rate shopping into consideration when assessing your history. Read more about ways to boost your credit score.

How to shop for a mortgage without hurting your credit

Since there is a grace period to shop around for mortgage rates, take advantage. If you shop and compare rates from lenders, you can potentially save thousands of dollars. Because buying a home is one of the most expensive endeavors you’ll have, saving money can be beneficial.

Shopping around and comparing rates can help you get the best deal. And reading lender reviews and knowing the ins and outs of the quotes you’re receiving can help you avoid paying extra fees. You should talk through your options with a lender and compare their rates with quotes from other lenders.

It’s also important to check your own credit score, so you know where you stand before you request these hard pulls. If you know your credit isn’t quite where you want it to be, you’ll have time to correct your score before a lender pulls it to evaluate you. And since soft pulls won’t negatively impact your score, you can check your score with peace of mind.

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