Aug
16
2013

The effect on credit scores when you check your own credit report

Dear Experian,

How often can I check my own credit without getting dinged for it? I do not want to affect my credit scores by over-checking.

- NDQ

 

Dear NDQ,

You can check your personal credit history as often as you like without affecting your credit scores.

Every time your credit history is accessed, an inquiry is added as a record of that access. What most people do not understand is that there are two types of inquiries. The first type is the result of your application for credit or other transaction you initiated. The second is the result of a review you did not ask for or that does not involve a credit account.

The important difference is that the first type is provided to other lenders when you apply for more credit. Inquiries that are the result of an application you submitted can indicate that you have additional debt not yet shown as an account on your credit report. That is relevant information to a lender’s decision.

The second type is shown only to you when you request your credit report. Lenders do not receive them and they do not affect credit scores. They include requests by you for your own credit report, reviews of your credit report for employment purposes, account reviews by your existing lenders, and reviews for making preapproved credit offers.

While there is much said about inquiries, their impact is highly overstated. If recent inquiries exist, they are listed as a score factor, but in fact they have little impact on credit decisions. If you have no negative information in your credit history, inquiries certainly won’t be significant enough to cause you to be declined. If you have late payments, collection accounts or other negative issues, in addition to recent inquiries, the inquires may be enough to put you into a higher risk position, and therefore, affect the lender’s decision.

A small decrease in your scores can be significant if you are a marginal credit risk because it can be the difference in being approved or declined, or paying a higher interest rate. But, inquiries will never be the only reason you are declined.

Thanks for asking.

 

- The “Ask Experian” team

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