How do you check your credit score without hurting it?

Your credit score is a crucial element of your financial health. It influences everything from your ability to get a loan and rent an apartment to your insurance rates. Understandably, you want to stay informed about your creditworthiness, but the concern of negatively impacting your score by checking it often prevents many people from doing so. The good news is that you *can* monitor your credit score without causing it to drop. This article explains how, clarifying the difference between hard and soft inquiries and providing practical methods for free credit monitoring.

Understanding Credit Scores and Inquiries

Before diving into how to check your credit score without harming it, let's clarify some key terms.

What is a Credit Score?

A credit score is a three-digit number that represents your creditworthiness. It's based on your credit history, which is a record of your borrowing and repayment behavior. Lenders use your credit score to assess the risk of lending you money. A higher score generally indicates a lower risk, leading to better loan terms and interest rates.

The two most commonly used credit scoring models are:

• FICO Score: Developed by Fair Isaac Corporation, the FICO score is widely used by lenders. It considers factors like payment history, amounts owed, length of credit history, credit mix, and new credit.
• VantageScore: Developed by the three major credit bureaus (Equifax, Experian, and TransUnion), VantageScore is another popular model. It also considers similar factors to FICO, but the weighting of these factors may differ.

Hard Inquiries vs. Soft Inquiries

The crucial distinction to understand is the difference between hard and soft credit inquiries.

Hard Inquiries (or "Hard Pulls")

A hard inquiry occurs when a lender checks your credit report to make a lending decision. This usually happens when you apply for a new credit card, a loan (e.g., mortgage, auto loan, personal loan), or a line of credit. Hard inquiries *can* slightly lower your credit score, especially if you have many of them in a short period. Lenders see multiple hard inquiries as a sign that you may be struggling to manage your finances or are taking on too much debt.

The impact of a hard inquiry is typically small and temporary. Most hard inquiries have minimal effect on your score, and any negative impact usually fades within a few months. Furthermore, your score will only be impacted by inquiries you authorize.

Soft Inquiries (or "Soft Pulls")

A soft inquiry occurs when you check your own credit report or when a company checks your credit for promotional purposes (e.g., sending you a pre-approved credit card offer) or for employment screening (with your permission). Soft inquiries *do not* affect your credit score. They are essentially invisible to lenders and are not considered when assessing your creditworthiness.

Essentially, soft inquiries are for informational purposes, while hard inquiries are directly related to a credit application.

How to Check Your Credit Score Without Hurting It

Knowing the difference between hard and soft inquiries is key to monitoring your credit score without damaging it. Here are several legitimate methods for checking your credit score without negatively affecting it:

1. Free Credit Monitoring Services

Numerous free credit monitoring services provide your credit score and credit report information without impacting your score. These services typically use soft inquiries to access your data.

• Credit Karma: Offers free credit scores and credit reports from TransUnion and Equifax. It also provides personalized recommendations for credit cards and loans.
• Credit Sesame: Similar to Credit Karma, Credit Sesame offers free credit scores from TransUnion and Experian, as well as credit monitoring and financial tools.
• WalletHub: Provides free credit scores and reports, along with credit monitoring and credit improvement advice.

While these services are generally safe to use, it's essential to read their terms and conditions carefully. Be aware that they often generate revenue by recommending financial products. You are not obligated to apply for any products they suggest.

2. Your Credit Card Statement

Many credit card companies now offer free credit scores as a benefit to their cardholders. This is usually displayed prominently on your monthly statement or through your online account. Check your credit card issuer's website or app to see if this feature is available. The score provided is usually a VantageScore or a FICO score based on the data reported to one or more of the major credit bureaus.

3. AnnualCreditReport.com

While AnnualCreditReport.com doesn't provide your credit *score*, it allows you to access your credit *reports* from Equifax, Experian, and TransUnion for free once a year. You can access all three reports at once, or you can stagger them throughout the year to monitor your credit more frequently.

Reviewing your credit reports is crucial because they contain the information that is used to calculate your credit score. By examining your reports, you can identify any errors or inaccuracies that may be negatively affecting your score. If you find any discrepancies, you should dispute them with the credit bureau that issued the report.

4. Non-Profit Credit Counseling Agencies

If you're struggling with debt or need help understanding your credit, consider consulting with a non-profit credit counseling agency. These agencies can provide free or low-cost credit counseling services, including a review of your credit report and score. They can also help you develop a budget, manage your debt, and improve your financial literacy.

Be sure to choose a reputable non-profit agency that is accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

5. Experian CreditWorks Basic

Experian, one of the three major credit bureaus, offers a free version of their credit monitoring service called Experian CreditWorks Basic. This service provides a free Experian credit report and score, as well as credit monitoring and alerts. Like other free services, it uses a soft inquiry, so it won't hurt your score.

Protecting Your Credit Score

Checking your credit score is only one part of maintaining good credit health. Here are some other steps you can take to protect your credit score:

• Pay your bills on time: Payment history is the most important factor in your credit score. Set up automatic payments or reminders to ensure you never miss a due date.
• Keep your credit utilization low: Credit utilization is the amount of credit you're using compared to your total available credit. Aim to keep your utilization below 30%.
• Don't apply for too much credit at once: Each credit application can result in a hard inquiry, which can temporarily lower your score.
• Monitor your credit report regularly: Review your credit reports from all three major credit bureaus at least once a year to check for errors or fraudulent activity.
• Be wary of scams: Protect your personal information and avoid scams that promise to "fix" your credit instantly.

The Importance of Regularly Checking Your Credit Report

While checking your credit score is important, equally important is regularly reviewing your complete credit report. Your credit report contains detailed information about your credit history, including your payment history, credit accounts, and any public records such as bankruptcies. Regularly scrutinizing your report allows you to:

• Detect Errors: Mistakes happen. Incorrect information on your credit report, such as misreported payment history or accounts that aren't yours, can negatively impact your score. Catching these errors early allows you to dispute them and get them corrected.
• Identify Fraudulent Activity: Unfamiliar accounts or inquiries on your report could be a sign of identity theft. Promptly identifying and reporting fraudulent activity can prevent further damage to your credit.
• Understand Your Credit Health: Reviewing your credit report provides a comprehensive view of your credit history and helps you understand the factors that are influencing your score.
• Negotiate Better Terms: A clean credit report can strengthen your position when negotiating interest rates or loan terms.

You are entitled to a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once every 12 months. You can request these reports through AnnualCreditReport.com.