Does your credit score go down when you check it?

You probably know just how important your credit score is and why tracking it is a good idea, but you aren't the only one worried that checking your credit score might cause it to change.

In a survey of Finty users, when asked if there was anything that nearly stopped them signing up, approximately 2% said they worried it would be added to their credit report and cause their credit score to drop. []

However, unlike many questions of a financial nature, there is a straightforward answer to whether checking your credit score has an impact.

Checking your credit score has no impact on it, either positively or negatively.

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What the credit reporting bureaus say

In Australia, there are three credit reporting bureaus and the following is what they have to say on the issue, quoting directly from their respective websites.

Experian

"Checking your own credit score is considered a soft inquiry and won't affect your credit."

Equifax

"Credit scores aren't impacted by checking your own credit reports or credit scores. In fact, regularly checking your credit reports and credit scores is an important way to ensure your personal and account information is correct, and may help detect signs of potential identity theft."

Illion

"Accessing your credit score and credit report through illion Credit Check will not affect your credit score."

Finty partnered with Experian — one of the world's leading credit reporting bureaus — to provide Australians with access to their credit score for free. Sign up to get yours here.

Hard vs. soft enquiries

There are two types of credit enquiries — a hard enquiry or a soft enquiry — and how they impact your score differs significantly.

Hard enquiries

When a lender runs a credit check as part of their decisioning process, it is classed as a hard enquiry. Hard enquiries are visible on your credit report, meaning other lenders can see them too.

A hard enquiry can temporarily lower your credit score, particularly if there are several hard enquiries within a short period of time (a sign that you may be experiencing difficulty making ends meet).

Applying for a credit card or home loan, for example, will result in a hard enquiry. Opening an account with a buy now pay later service may result in a hard enquiry also. Zip Pay are known to perform a credit check when you apply to open an account with them.

Soft enquiries

A soft enquiry is not linked to a credit application and has no impact on your credit score.

Checking your credit score — whether initiated by you personally or someone to whom you gave permission — is classified as a soft enquiry. Lenders often run a soft enquiry as part of the pre-approval process for a loan or insurance policy. Employers may run a soft enquiry for new job applicants as may landlords, who may use it to evaluate new tenants.

There's a common misconception that you checking your credit score will lower it, but that's actually not the case. Regularly checking your credit score and credit report helps make sure all of your information is correct, can detect potential fraud or identity theft and shows where you stand from a financial health perspective.

Does a credit check lower your score?

Checking your credit score on your own, which is a soft credit check or inquiry, doesn't hurt your credit score. But when a creditor or lender runs a credit check, that's often a hard credit check, which could affect your credit score.

What is a soft credit check?

A soft credit inquiry, also called a soft credit check or soft pull, is usually done by you or another authorized person, like an employer. Soft credit inquiries don't affect your credit score because you're not actually applying for credit, and these types of inquiries don't necessarily require your permission.

These can occur when you request a copy of your credit report or check your credit score. Other types of soft credit inquiries include a landlord or employer checking your credit or a creditor checking your credit to offer you pre-approval or pre-qualification.

What is a hard credit check?

A hard credit check, also called a hard credit inquiry or hard pull, is what a lender or creditor runs when you take the next step and actually apply for credit. Hard credit checks do affect your credit score and may stay on your credit report for two years.

What can lower your credit score?

Checking your credit score won't lower it, but there are a number of factors, in addition to hard credit checks, that can lower your score.

The VantageScore(R) 3.0 scoring model, which Chase Credit Journey uses, is made up of six factors:

• Payment history: tracks whether your payments are made on time. Late payments can hurt your credit score.
• Credit history: how long you've had your different credit accounts open. The longer your credit history might mean the better your credit score, depending on other factors.
• Credit usage: the amount you owe compared with the amount of credit you have, also known as your credit utilization ratio. As a rule of thumb, it's best to keep credit usage under 30 percent.
• Total balances: the amount of your recently reported balances, both current and delinquent. The lower your balance, the better.
• Recent credit: the number of new credit accounts you've opened. Creditors and lenders typically run a hard credit check each time you apply for credit, and multiple hard inquiries in a short period of time can lower your credit score.
• Available credit: the amount of credit available to you. This also influences your credit utilization ratio, so the more available credit you have compared with the amount of credit you've used, the better.

How to get your credit report

You can check your credit score for free using the Chase Credit Journey, and if you want to do a deeper dive into your credit history, you can review your credit report using this feature as well.

You can get a free copy of your credit report once a year from each of the three major credit bureaus (Experian®, Equifax® and TransUnion®) at annualcreditreport.com