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Does Checking Your Credit Lower It?

As Canadians, we value financial responsibility. We pay bills on time, save for the future, and try to maintain a good credit score. But have you ever wondered what goes into determining your credit score? And more importantly, does checking your credit lower it?

First, let’s define “checking your credit.” When you apply for a loan or credit card, the lender checks your credit report and score as part of the application process. This is called a “hard inquiry.” When you credit check your own credit report or score, it’s called a “soft inquiry.”

Does Checking Your Credit Lower It

No, soft inquiries don’t affect your credit score. In fact, it’s a good idea to check your credit regularly to make sure everything is accurate and up-to-date. This can help you identify and fix errors or discrepancies that could lower your score.

However, hard inquiries can affect your credit score, at least in the short term. When a lender checks your credit for a loan or credit card, it leaves a mark on your credit report. This can temporarily lower your credit score, especially if you have a lot of hard inquiries in a short time.

What Does This Mean For Canadians Applying For A Loan Or Credit Card? 

Should you worry about the institutions checking your credit too often? Not necessarily. While hard inquiries can temporarily lower your credit score, they usually only have a minimal effect. As long as you have a good credit history and healthy credit habits, a few hard inquiries shouldn’t significantly lower your score.

That said, it’s still a good idea to be aware of the number of hard inquiries on your credit report. If you’re shopping for the best loan or credit card rates, try to do it within a short period to minimize hard inquiries. And of course, pay your bills on time and maintain a healthy credit utilization ratio to keep your credit score as high as possible.

In conclusion, checking your credit (through a soft inquiry) won’t lower it. In fact, it’s a good idea to regularly check your credit to ensure everything is accurate and up-to-date. You can do so with services such as Equifax. Hard inquiries can temporarily lower your credit score, but as long as you have a good credit history and healthy credit habits, they shouldn’t have a significant impact. So go ahead and check your credit, but do it responsibly and be aware of the number of hard inquiries on your credit report.