Effect of Checking Your Own Credit Report on Your Credit Score

What everybody needs to understand first of all is that there are two kinds of enquiries that are recorded on a credit report. One is called a hard enquiry which is made due to a business transaction that you have initiated with a lender mostly as a result of an application for a loan or credit. The second kind of enquiries are call soft enquiries that are made by people for purposes other than credit lending such as enquiries made by prospective employers were verification, insurance companies, preapproved credit card offers, landlords etc.

All these kind of enquiries come under the category of soft enquiries that are not shown to the lenders in their copy of the credit report. Since this information is not provided to the lenders it has no bearing on your credit rating and is not included while calculating your credit score. Accessing your own credit report will definitely add an enquiry to your credit report but it will be of the soft kind which means that you can access your credit report as many times as you like without impacting your credit score at all.

It should also be understood that the impact of enquiries on a credit score is somewhat overrated. If you have a strong credit history you need not get overly worried about the impact of enquiries on your credit score. The impact in this case will be minimal if at all and may only be temporary. The impact of other negative information such as late payments, delinquent accounts, collection accounts is much more serious than the result of an enquiry.

The impact of a hard enquiry on the credit score may be important for those people whose credit rating is already suffering. Additional enquiries may push the score down beyond a certain threshold where the lender might find the lending risk to be very unfavourable. While enquiries are hardly ever the reason for denial of credit, they can push your credit score beyond a certain point where you become a bad risk. But this usually only happens with people whose credit score is already marginal.