There’s a common misconception that checking your own credit score will hurt it, at least temporarily. But this is untrue. The reason lies in the difference between a “hard pull” and a “soft pull.” Without a general understanding of how these terms differ, you may miss out on valuable financial information and can even hinder your chances of securing a great rate on credit cards and loans. Use this guide to boost your knowledge so you can make smart money decisions regarding your credit!
A soft pull is also referred to as a soft inquiry, and it’s used to screen your credit score. It offers a high-level overview that, when requested by a creditor or other party, is used to gauge your creditworthiness. A soft pull does not affect your credit because it doesn’t provide access to your more in-depth report.
Some situations that trigger a soft pull include:
- Checking your own score. General Electric Credit Union (GECU) members have access to their FICO® Score, updated quarterly, for free through Online Banking and our mobile app.1
- Employer background checks.
- Pre-qualification offers on credit products (not an application).
There are many benefits of knowing your credit score. You’ll see what potential creditors will see when they receive your application. This may instill you with confidence or inspire you to push pause and improve your credit score before applying. The latter may be advantageous, as a higher credit score will increase your chances of scoring a great rate – making it less expensive to borrow in the long run.
Periodically checking your score can also help you spot red flags. For example, you may notice your credit score tanked from one month to the next with no explanation. Upon further investigation, you may discover someone fraudulently opened a credit card in your name and maxed it out. Quick action is crucial when addressing fraud, but you can’t act until you know it’s there. Monitoring your score and accounts will give you the awareness you need to act quickly.
- Want to learn more about credit basics? Get your complimentary copy of our digital eBook, The Ultimate Beginner’s Guide to Credit.
A hard credit check gives creditors a more thorough understanding of your credit history and behaviors. When you apply for a credit card or loan, you consent to giving them access to the information on your credit report. This can include:
- Personal information
- Account information, such as payment history
- Any collection accounts in your name
- Courthouse public records, like bankruptcy
- Credit inquiries
Any hard inquiry will remain on your report for up to two years, but its effect on your score is more short lived. You’ll only notice a dip for a few months. Because of this, strategic timing may become important. For example, it would not be beneficial to apply for a credit card a month before applying for a mortgage loan, as your score would be lower.
At General Electric Credit Union, we provide a wealth of complimentary resources and tools as part of our commitment to Improve the Quality of Financial Lives. Our Online Banking and mobile app users have access to their FICO® Score for free! Your score is updated quarterly but can be checked at any time. Visit: annualcreditreport.com to access your full report from all three credit bureaus once a year. Instead of requesting from all three at the same time, you could space out these requests by a few months to dig deeper into your report and keep tabs on changes.