There are a number of credit scoring models, as well as various consumer credit reports available. However, many of them have a few things in common, and many credit scoring models are based, in some way, on the FICO score.
For most of these scoring models, it is important to realize that just having someone look at your credit can result in a change to your credit score. However, not every inquiry into your credit is going to be a negative event. There are two main types of inquiries: hard and soft.
Hard Credit Inquiries: These Affect Your Credit Score
As you consider your credit score, it is important to distinguish what makes a credit inquiry something that is “hard”. A hard credit inquiry is, for the most part, one that you request for the purpose of acquiring credit. If you are borrowing money for any purpose, the lender will check your credit at your request. When you want someone to check your credit so that you can be approved (or denied) a loan, this will be considered a hard inquiry, and it will affect your credit score, possibly lowering it between five and 10 points — or more — for a few months.
It is also worth noting that sometimes other organizations may do a hard credit pull on your account. Cable/satellite TV providers, cell phone providers and insurance companies may all do hard inquiries on your report. If you call asking for services, this is a possibility, and it can affect your credit score to some degree.
You can, however, ask the service provider if they can perform a soft credit inquiry when checking your situation. Many financial service providers will oblige, only performing a soft credit pull if borrowing isn’t going to be part of the picture. This can prevent you from taking a hit to your credit score.
Soft Credit Inquiries Don’t Affect Your Credit Score
On the other hand, “soft” credit pulls don’t impact your credit score. These are inquiries made by companies for marketing purposes. The main point here is that you didn’t ask the company to check your credit history. The company decided to check your history on its own, probably in an attempt to market a credit card to you, or get you to switch insurers. When someone checks your credit report or score, without you requesting it and providing permission, it won’t affect your credit score.
Additionally, it is important to note that your credit score won’t be impacted when you check your own credit score. You can check your own credit report and your own score all you want, and never have a negative effect on your credit score. Because you are encouraged to check your credit in order to keep tabs on your situation, as well as pinpoint issues related to identity theft, there is no penalty for checking your own credit.
Most credit reports will list the companies that have inquired into your credit. They should be divided into soft pulls and hard pulls, so you can tell which are impacting your credit score, and which aren’t.