Does My Credit Rating Drop Every Time I Check My Report?

Many things can drop your credit rating, including inquiries from banks and potential lenders. A conscientious consumer checks her credit report routinely in order to stay on top of the listed information. Three credit reporting agencies are responsible for listing and maintaining accurate consumer credit information. Each agency uses a different model to calculate ratings, but certain factors carry similar weight with each calculation.

Definition

A credit rating is a three-digit number that reflects a consumer's financial well-being at a particular point in time. Credit ratings are based on specific account information listed in a consumer's credit report. Creditors, collection agencies and debt buyers report the account information to the three agencies.

Accessibility

Each consumer is entitled to at least one free credit report from each agency during a 12-month period. Consumers may contact Experian, Equifax or TransUnion individually to request a report. Consumers may also visit annualcreditreport.com, a site authorized by the Federal Trade Commission (FTC) to provide all three free reports with one contact. Consumers who have been denied credit, insurance or employment based on their credit report information have the right to additional free reports.

Factors

Several primary factors affect your credit rating, but payment history and outstanding debt are the two heavy hitters. These two factors account for 65 percent of your overall credit score; payment history is 35 percent and outstanding debt is 30 percent. Other factors include length of credit history at 15 percent, credit mix at 10 percent and new credit at 10 percent.

Inquiries

Credit inquiries are divided into two categories: hard and soft. Hard inquiries are from potential lenders to assess a consumer's credit rating. Consumers authorize hard inquiries when they apply for loans or open certain types of bank accounts. Soft inquiries such as those made by credit card companies fishing for a new account do not impact a credit rating. Credit report checks by consumers are considered soft inquiries.

Conclusion

According to experian.com, the only inquiries that impact a credit rating are the ones by potential lenders that are initiated by the consumer. Inquiries are added to the report file each time a consumer or other party makes an inquiry, but not all inquiries are shown to potential creditors. Your credit rating does not drop when you check your credit report.