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Highlights:
Checking your credit reports or credit scores will not impact credit scores
Regularly checking your credit reports and credit scores is a good way to ensure information is accurate
Hard inquiries in response to a credit application do impact credit scores
Many people are afraid to request a copy of their credit reports – or check their credit scores – out of concern it may negatively impact their credit scores.
Good news: Credit scores aren't impacted by checking your own credit reports or credit scores. In fact, regularly checking your credit reports and credit scores is an important way to ensure your personal and account information is correct, and may help detect signs of potential identity theft.
Impact of soft and hard inquiries on credit scores
When you request a copy of your credit report or check credit scores, that’s known as a “soft” inquiry. Other types of soft inquiries result from companies that send you promotional credit card offers and existing lending account reviews by companies with whom you have an account. Soft inquiries do not affect credit scores and are not visible to potential lenders that may review your credit reports. They are visible to you and will stay on your credit reports for 12 to 24 months, depending on the type.
The other type of inquiry is a “hard” inquiry. Those occur after you have applied for a loan or a credit card and the potential lender reviews your credit history.
Hard inquiries do affect credit scores, but if you’re making a large purchase - such as buying a house or securing a mortgage - and shopping around for the most competitive rates, multiple hard inquiries are generally treated as one hard inquiry for a given period of time, typically 14 to 45 days. That allows you ample time to check different lenders and find the best loan terms for you. This multiple-hard inquiry exception generally does not apply to credit cards. Find out more information on hard inquiries and your credit.
Getting your credit reports
You’re entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus by visiting www.annualcreditreport.com. You can also create a myEquifax account to get six free Equifax credit reports each year. In addition, you can click "Get my free credit score" on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.
When checking your credit report, it’s important to make sure all your personal information, such as your name and addresses, is accurate and there isn’t information you don’t recognize. In addition, make sure your account information is accurate and complete. Do the account balances, credit limits, and payment history look accurate? Is there account information listed that you don’t believe is yours?
If you see account information that you believe is inaccurate or incomplete on your credit reports, contact the lending company directly. You can also file a dispute with the credit bureau providing the credit report. At Equifax, you can create a myEquifax account to file a dispute. Visit our dispute page to learn other ways you can submit a dispute.
What Is A Credit Score?
A credit Score is a number used by lenders as an indicator of how likely an individual is to repay his debts and the probability of going into default. It is an independent assessment of the individual's risk as a credit applicant.
CBS's Credit Score:
- A CBS Credit Score is a four-digit number based on your past payment history on your loan accounts.
- The score range from 1000 to 2000, where individuals scoring 1000 have the highest likelihood of defaulting on a payment, whereas those scoring 2000 have the lowest chance of reaching a delinquency status. Together with the score, the risk grade and risk grade description are provided.
- Your credit score is just one factor used in the application process. Other factors apart from your credit report, such as your annual salary, length of employment, bankruptcy/litigation information, number of credit facilities may also be taken into consideration by lenders during a loan application.
- CBS neither "blacklist" nor play a part in the lending approval decision which is fully undertaken by lenders and its lending policies. CBS instead, only provides specific factual credit-related information about consumers who have credit or loan facilities to the lenders.
Description of Credit Score
Factors that Affect Your Credit Score?
1. Utilization Pattern
- This refers to the amount of credit amount owed/used on accounts by individuals.
2. Recent Credit
- Lenders may perceive that you are over-extending yourself if you have newly booked credit facilities within a short period of time.
- Consumers are advised to apply for new credit in moderation.
3. Account Delinquency Data
- Presence of delinquency (late payment) on your loan accounts will reduce your credit score.
4. Credit Account History
- A consumer with long established credit history is deemed to be more favorable or a reliable borrower when compared to one who has limited or no credit history.
- Accounts with history of prompt payments will help to boost your credit rating.
- 12 months of account repayment conduct (closed and defaulted accounts are also included) as displayed under the Account Status History in your credit report is used for score calculation.
5. Available Credit
- This refers to the number of accounts available (open or active) for credit.
6. Enquiry Activity
- This refers to the number of new application enquiries found in your credit
- Each time a potential bank/financial institution pulls your credit report in response to a new loan application, an enquiry is placed on your file. Having too many enquiries in your credit report indicate to lenders that you are trying to take on more debt, therefore increasing your credit exposure.
- To keep your enquiries to a minimum, try to limit the number of loan facilities and credit cards which you apply for.
- Review enquiries on existing loan facilities do not affect your score.