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The answer is yes, and no. Lenders and credit card issuers perform two types of checks on your credit. The first, a soft credit check, doesn’t make an impact at all. The second, a hard check, knocks a few points off every time. We’re going to walk you through each and discuss what they mean for your credit score.

Why does your credit score matter?

When determining whether to give you a loan or a credit card, lenders and credit card issuers look at your score and credit history.

“A credit score is a number that rates your credit risk. It can help creditors decide whether to give you credit, influence the terms they offer or the interest rate you pay,” says.

A higher score helps convince lenders that you can make repayments in full and on time. They may agree to a larger loan or higher credit limit as a result. Having one will often make it easier to obtain housing or lower insurance rates, for instance.

Lenders and creditors are less likely to approve you for a loan or credit if your score is low. If they do, you might get charged more interest because of the higher risk. Focus on improving your credit score first before applying for new credit.

Know the score: low, high, or somewhere between

Credit scores are three-digit numbers between 300 and 850. Lenders may calculate these ratings based on the reports they receive from credit bureaus, or they might use a commercial scoring system like FICO.

There are several small credit bureaus, but the ones you’ve probably heard of are the influential big three: Equifax, TransUnion, and Experian. Each operates nationwide, and lenders, including financial institutions, report your credit history to them.

Here’s a breakdown of how Equifax rates credit scores:

670 to 739 740 - 799 800+
Good Very Good Excellent
Acceptable risk - this borrower has a better chance of making their repayments in full and on time. They may get better terms. Lower risk - this borrower is more likely to make timely, full repayments. The lender will feel more confident about offering them good terms. Low risk - this borrower is very likely to make repayments with no difficulty and may be approved for large loans and high credit limits with favorable terms.

How to monitor and understand your credit score: the soft check

So what is a soft credit check? In short, it’s a soft inquiry that doesn’t require a lender or creditor to get a full copy of your credit report. This won’t affect your credit score. While soft checks stay on your report for 12 to 24 months, they aren’t visible to other potential lenders.

For example, if you request a copy of your credit report, this is a soft check. Although your score won’t appear on the report, the data it contains will help you to better understand it.

In fact, financial experts encourage checking your credit report at least once a year to make sure there are no errors that could keep you from getting credit or the best available terms on a loan, according to the Consumer Financial Protection Bureau.

How hard credit checks lower your credit score

Hard credit checks, also known as hard inquiries or hard pulls, typically affect your credit score. Each time a lender or creditor requests one from a credit bureau, your score drops a few points, but only briefly.

Organizations should never perform hard credit searches without your knowledge or consent. They usually occur when you apply for credit or a loan. As such, a lender views your full credit report, which shows how often you’ve applied for credit. Many lenders will consider you a higher risk if they see lots of recent applications.

Now, if you’re applying for something big, like a mortgage, your score will only take one hit. The credit bureaus often treat this check as just one hard inquiry (usually covering a period of 15 to 45 days).

This doesn’t apply to credit cards, though. Multiple credit card applications will result in point deductions from your score with each inquiry.

Prepare for hard checks with soft checks

You can use soft credit checks to get an idea of how the hard checks will make an impact. Start by requesting a credit report. This breaks everything down with handy visuals from your credit reports issued by Experian and TransUnion.

Other reasons your credit score drops

Have you ever looked at your report and questioned why your credit score dropped? Well, the reason isn’t always immediately obvious.

If you’re sure you haven’t had any issues with late payments, multiple inquiries or outstanding account balances, then it could be a mistake. If so, you can file a dispute with the bureau.

Checking your report regularly is key. It’s easy to request a report from any of the three major agencies at

Disclaimer: This story was originally published on October 29, 2021, on For more information on credit checks and how they affect your credit please visit:

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