Does Checking My Credit Report Affect My Credit Score?

Checking a credit report is necessary to ensure information is correct and also serves as a pre-emptive strike against identity theft if the report is regularly monitored. Many people wonder if checking their credit report affects their credit score, and the answer is... no. When an individual checks his or her own credit through a service such as Free Credit Report or Annual Credit Report, there is no change in the fico credit score because this is not considered an inquiry.

The changes to a fico credit score come from inquires from creditors, rather than your own inquires. What's an inquiry? An inquiry is when a creditor takes a look at your credit reports for the purpose of deciding whether or not to lend money. Employers and insurance companies may check a credit report for their own purposes and while these inquiries will display on the report, these will not count toward the fico score, because no extension of credit has been offered.

Multiple Inquiries

Shopping around for the best mortgage or auto loan rate is never a bad idea. The credit agencies understand when people are looking credit within a short period of time that they are trying to find the best deal for their financial situation and do not penalize them with several inquiries on the report. It is when these inquires are not clustered within a reasonable amount of time--around 14 days--that the inqury will display on the credit report. An inquiry will not likely drop the score by too many points, but when there are several inquires at one time or very close together, lenders are flagged because a hunt for credit usually signifies an increased risk. In addition to many inquiries at once, opening several accounts at once will cause a drop in score because of the increased risk. The more credit a person has at one time, the less likely he or she is able to pay all the obligations on time, therefore, the credit score drops to prevent the person from being bogged down with debt.

The Impact of Inquires

Unfortunately, there's no magic answer to how much an inquiry will impact a credit score. The number of points the credit score will go down depends on a number of factors such as the number of credit lines open, the state of the credit history, and the length of the credit history. Someone with short or bad credit history will likely see a higher impact from additional inquiries than someone who has a longer or better credit history.

It is best to apply for a line of credit with a few different lenders within a few business days. If a line of credit is opened, wait several months, while working to establish a good payment record with them before attempting to apply for and open more lines of credit. Making payments on time is the key to developing any positive credit report, and continuing to do so is the key to maintaining it.


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