Does Your Credit Score Really Drop If You Check It?

Even though many jobs or companies might look into your credit, hard inquiries are generally limited to a few situations. Hard inquiries are mainly used if you apply for a loan, credit card, phone, or utility, or if a landlord pulls your credit for a rental application. These can, and will, negatively impact your credit score. With that being said, hard inquiries will generally only result in a loss of between one and five points (but can lower it by 10 points in some cases), so those with solid credit won’t be too impacted. Despite the potential to drop your score, hard inquiries only affect your score for one year, and only appear on your credit report for two years.

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Another thing to keep in mind is that credit report-producing bureaus (the main three being Equifax, Experian, and TransUnion) as well as credit score companies like FICO are more amenable to the concept of rate shopping than ever before. For instance, if you are researching the best interest rate on a car loan you will probably have multiple credit checks during a small period of time while you apply to different lenders. Rather than each credit check negatively impacting your credit score, companies like FICO have created time frames for rate shopping (the current FICO model allows you to consolidate inquiries in a 45-day period). This ensures multiple inquiries only count as one hard inquiry on your report. However, this doesn’t apply to multiple credit card applications.

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