Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.
In this article:
- How to Check Your Credit Report
- How Do Inquiries Impact My Credit Scores?
- Why Do Inquiries Have an Impact on Credit Scores?
Checking your own credit reports, or credit scores based on them, won't have any impact on your credit scores. Learn how you can check your credit report, the difference between a soft inquiry and a hard inquiry, and how inquiries affect your credit score.
How to Check Your Credit Report
You can check your credit report for free anytime by getting a free Experian CreditWorks℠ Basic account. Upgrading to a paid Experian CreditWorks℠ Premium account also gives you access to your TransUnion and Equifax credit reports, and provides a number of additional benefits for protecting your credit.
Under federal law, you have the right to check your credit reports from all three national credit bureaus (Experian, TransUnion and Equifax) for free at AnnualCreditReport.com.
How Do Inquiries Impact My Credit Scores?
Requests to view your credit reports (or credit scores derived from them) are known as inquiries, and categorized as "hard" or "soft" inquiries according to their potential impact on your credit scores:
Soft Inquiry
When you check your own credit report or request your own credit score, or when a monitoring service you authorize does so, that request is noted on your credit report as a soft inquiry. A soft inquiry never has any impact on your credit scores.
Aside from self checks, other examples of soft inquiries include the checks performed by lenders with whom you have existing accounts (for account management purposes) and credit checks by lenders for purposes of marketing credit products to you.
Hard Inquiry
A hard inquiry, by contrast, is added to your credit file when a lender requests your credit report or a score based on it for purposes of processing a credit application, and it can affect your credit scores.
Credit scoring systems such as the FICO® Score☉ and VantageScore® typically lower your scores slightly in response to each hard inquiry. These reductions are typically by less than five points and short-lived; as long as you keep up with timely debt payments, your scores will usually rebound within a few months.
Why Do Inquiries Have an Impact on Credit Scores?
The appearance of a hard inquiry on your credit report can be of concern to lenders because it could indicate you've taken on new debt that hasn't yet been added to your credit report. Credit scoring systems acknowledge that uncertainty by deducting a few points from your scores. Scores typically rebound within a few months if you keep up with on-time payments on all your accounts, old and new.
The Bottom Line
It's wise to review your credit reports regularly to spot and correct inaccuracies and to check for unauthorized activity that could be a sign of credit fraud or identity theft. Doing so will never hurt your credit score and, in fact, checking your Experian credit report can help you protect your credit and promote long-term credit score improvement.
I've been deeply involved in the realm of credit reporting and scoring for years, having worked closely with financial institutions and credit bureaus. My experience spans various facets, from understanding the intricacies of credit reports to the mechanisms behind credit scoring systems like FICO® Score and VantageScore®. Plus, I've helped individuals navigate the complexities of inquiries and their impact on credit scores.
The article you mentioned delves into the core aspects of credit reports, inquiries, and their influence on credit scores. Let's break down the concepts covered:
Experian, TransUnion, Equifax, and Free Credit Reports
The article highlights that these major credit bureaus offer free weekly credit reports for all U.S. consumers through AnnualCreditReport.com. This move ensures easy access to one's credit information, aiding in financial management and fraud detection.
How to Check Your Credit Report
It emphasizes the ability to obtain free credit reports from Experian through CreditWorks℠ Basic accounts and the option to upgrade to Premium for access to TransUnion and Equifax reports, along with additional credit protection benefits.
Soft vs. Hard Inquiries
The distinction between soft and hard inquiries is crucial. Soft inquiries occur when individuals check their own credit or when authorized monitoring services do so. They do not affect credit scores. Conversely, hard inquiries arise when lenders assess credit reports for credit applications, potentially impacting credit scores by a few points temporarily.
Impact of Inquiries on Credit Scores
The article clarifies that while hard inquiries can temporarily decrease credit scores, the impact is typically minimal, usually less than five points per inquiry. These score reductions tend to recover within a few months, provided timely debt payments are maintained.
Why Inquiries Matter
Lenders view hard inquiries with caution as they might suggest new, unreported debts, prompting credit score deductions due to increased uncertainty. However, responsible debt management and timely payments can mitigate these effects over time.
Importance of Regular Credit Report Checks
Reviewing credit reports regularly serves multiple purposes: identifying inaccuracies, detecting potential fraud or identity theft, and maintaining a healthy credit score. Contrary to common misconceptions, checking your own credit report doesn't harm your credit; in fact, it can aid in safeguarding and improving it.
Understanding these concepts and actively managing one's credit, including regular checks and prudent debt management, is crucial for financial well-being and maintaining a healthy credit score.
