Myth: Pulling a credit report on yourself affects your credit score.
Reality: Any time a credit report is pulled on you it is one of two types. A soft inquiry or a hard inquiry. Soft inquires do not affect your credit score, but hard inquires may affect your credit score.
So in what instances would you have a soft inquiry on your credit report, thereby not affecting your score? Here are a few examples:
- You pull a credit report on yourself. You request Equifax or Trans Union to send YOU a copy of your credit report by mail or online (you have to pay if you do it online). You can do this as many times as you want without it affecting your credit score. To read more of pulling credit reports, check out Myth #2 on Credit Reports.
- A financial institution/lender that you already do business with pulls your credit profile (as you have already provided consent for them to do so when you previously signed documents when opening an account with them) to see if you qualify for any additional credit products. In many instances you do not request this, but may be notified by the bank that you qualify. Under most instances, this is counted as a soft inquiry
So in what instances would you have a hard inquiry on your credit report, thereby affecting your credit score? Here are a few examples:
- If you seek a lender asking for a new credit product (i.e. line of credit, mortgage, credit card etc.)
- If you see a lender for an increase in the limit of your existing credit product (i.e. increasing your credit card or line of credit limit).
- If you request another organization to pull your credit report on your behalf from Equifax or Trans Union.
- Most instances where you are seeking credit from a lender and you initiate the request (either by generating an application or as a general inquiry).
Solution: If you are being offered or requesting a credit product from a lender, you can ask them if the application process will affect your credit score, even slightly. If it will be then you know it is a hard inquiry. If you it won’t then it will be a soft one. More than likely though, if you are initiating the conversation on obtaining credit, then it will be a hard inquiry. Shopping around for credit is not bad as long as you do it within a 30 day time window called a “buying event”. This impacts your credit score less than spreading the search over more than 30 days. If you have been shopping around for credit and have not yet been approved, wait 6 months to a year before trying again to avoid significantly impacting your credit score even further.
To learn more about other credit myth, check out my previous posts below:
Tags: a lot of debt, bankruptcy, Budgeting, buying event, compound interest, Credit, credit report, Debt, debt journey, Equifax, getting credit, goals, hard inquire, interest relief, Investing, modest living, net worth, planning, pulling your credit report, renting, Savings, soft inquiry, student debt, student loan, TransUnion