Does checking FICO score hurt credit? This is a common question among individuals who are keen on maintaining a good credit standing. The answer to this question is not straightforward and depends on various factors. Understanding how checking your FICO score affects your credit can help you make informed decisions about your financial health.
Checking your FICO score can be done in two ways: soft inquiries and hard inquiries. Soft inquiries occur when you check your own credit score or when a lender checks your score for pre-approval purposes. Hard inquiries, on the other hand, happen when you apply for a new credit card, loan, or mortgage, and the lender pulls your credit report to assess your creditworthiness.
Soft inquiries do not hurt your credit score. In fact, checking your own credit score is encouraged by the major credit bureaus, as it allows you to monitor your credit health and identify any potential issues. By regularly reviewing your credit report, you can take proactive steps to improve your score and prevent fraud. However, it’s important to note that multiple soft inquiries within a short period of time may raise a red flag for lenders, as it might suggest that you are actively seeking new credit, which could negatively impact your score if you have a high credit utilization rate or other negative factors on your report.
Hard inquiries, on the other hand, can have a temporary negative impact on your credit score. Each hard inquiry can cause your score to drop by a few points, but this effect is usually short-lived. Typically, the impact of a hard inquiry fades after a few months, and your score will begin to recover as long as you maintain good credit habits. It’s important to minimize the number of hard inquiries by not applying for multiple new lines of credit within a short timeframe.
There are a few strategies you can use to minimize the impact of hard inquiries on your credit score:
1.
Wait for a few months before applying for new credit if you have recently applied for multiple loans or credit cards.
2.
Focus on building a strong credit history by paying your bills on time and maintaining a low credit utilization rate.
3.
Consider using a pre-qualification tool to check if you are likely to be approved for a new credit card or loan without a hard inquiry.
In conclusion, checking your FICO score does not hurt your credit if it’s a soft inquiry. However, hard inquiries can have a temporary negative impact on your score. By understanding the difference between soft and hard inquiries and taking proactive steps to manage your credit, you can minimize the impact of checking your FICO score on your overall creditworthiness.
