How much it hurts.

If someone looks at your credit, how much does it hurt your credit score? There are basically two scenarios.

  1. If someone you currently have an account with pulls your credit, there is no impact to your credit score. When you owe someone money on a loan or mortgage or credit card account, they have the right to pull your credit every month to make sure you are still a viable credit risk. This credit pull does not impact your score. They can cancel or adjust your account (on credit cards) by increasing rates, lowering the credit limit or cancelling the card if you miss a payment anywhere. Miss a Sears payment and you could lose your VISA account. Doesn't always happen....but can. For this blog, just know that the credit pull doesn't impact your credit score.

  2. If you apply for credit, or new cell phone service, or cable company, etc. the rules are different. The impact on your credit score will be visible. This portion of the credit score only impacts 10% of the score (up to 85.0) points and the impact is temporary. The inquiry will stay on your credit report for several years for all to see, but the score will only be impacted for about 120 days. The scoring system will lower your score when someone looks at your credit and even more points if you open a new account. If you apply at several companies for credit, your score could drop quite a few points.

It works along these lines if you apply for one account. No real impact in the first 2 weeks to 1 month. Then the score is lowered for 90 days.....then the score goes back up. Ideally, do not apply for credit unless you know you are moving forward with a purchase of some kind. Don't be impulsive, apply for an item, get approved, and then cancel or refuse....the lowering of your score will have already happened....just for looking at your credit.

Just think before you apply!

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