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When it comes to credit scores, widespread misinformation and myths abound. For example, some people have been led to believe that carrying a balance on a credit card is the best way to improve your score, which is not true. Others insist that closing old credit cards you aren’t using can give your credit a much-needed boost, which is also wrong.
Yet there is one credit myth that just doesn’t seem to go away. Many people believe that checking your own credit score or credit report will damage your credit. Luckily, there are plenty of ways to check your credit score and even what’s on your credit report without hurting your own credit.
First, it’s important to understand the two ways someone can look at your credit report. The first is when you have applied for a mortgage, car loan, credit card, or other form of credit, and your lender wants to see your credit report to determine if you are a good credit risk. It shows up on your report as a “serious inquiry” or a “difficult request” and it affects your credit score, but only by a few points.
However, there are times when you haven’t applied for credit from anyone, but a credit issuer wants to check your credit file to offer you a pre-approved or promotional offer. It still shows up on your report, but it’s called a “soft inquiry” or “soft checkout,” and these soft checkouts don’t affect your credit score in any way.
The good news is that when you check your own credit score, you almost always pull off a smooth ride, which means you can check your credit and see where you stand without causing unnecessary damage.
So if your goal is to take a look at your credit score without causing harm, there are plenty of strategies that allow you to do just that. Many credit cards, including ones you may already own, offer a free credit score as a cardholder benefit. This includes cards from American Express, Chase, Capital One, Citibank and others.
Some credit card programs even offer a free credit score that anyone can sign up for. For example, Capital One’s CreditWise allows you to view your VantageScore 3.0, provided by TransUnion, without having a Capital One credit card. You can also sign up for alerts that let you know how your credit score changes over time.
Checking your credit score is entirely different from checking your credit report. Your credit score is a numerical representation of your overall credit health, but your credit report is where all the information about your credit accounts, payments, and overall credit usage is listed.
Although your credit report doesn’t list your credit score, there are still plenty of reasons to keep tabs on the information it contains. Your credit report is the first place fraudulent accounts opened in your name will appear. This is one of the reasons many experts suggest checking your credit reports on a semi-annual basis, as it’s one of the best ways to spot early signs of identity theft.
Not only that, but your credit report may contain errors or misinformation that could ultimately hurt your credit score, since the information on your credit report is used to calculate your score. It’s a fairly simple process for disputing incorrect information that appears on your credit report, but you won’t know what’s there unless you take the time to look.
Luckily, when it comes to checking your credit report, you can do it for free and without hurting your score at annualcreditreport.com. This website, which is the only site authorized by federal law, normally allows you to check your Experian, Equifax and TransUnion credit reports once a year free of charge. But right now, until the end of 2022, you can view your reports for free as often as once a week.
Now you know you can check your credit report and score without damaging the credit you’ve worked hard to build, but why should you care? Does your credit score really matter as much as some people say?
It’s easy to think that your credit score isn’t important, but anyone who’s ever bought a house, borrowed money for a car, or applied for a credit card can tell you otherwise. While your past credit behavior isn’t the only factor considered when applying for new credit, your credit score alone tells lenders a lot about what they want to know.
If you have a credit score considered “good”, i.e. a FICO score of 670 or better, you have a much higher chance of being approved for the new line of credit you want with conditions. fair. But if your credit score is lower than that, you might have to pay more fees and higher interest down the road, or you might not be approved at all.
Interestingly, your credit can even impact your auto insurance rates or your ability to get a job if a potential the employer asks to see an edited version of your credit report as a condition of your employment. Good credit can be the key to getting the life you want, but the opposite is also true.
Checking your credit won’t hurt your score, and it’s the best way to know where you stand. It always makes sense to keep your credit score in good shape, so yes, check your credit score now and track how your score changes over time.
Read more stories in our “Credit Myths” series:
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