How Much Does a Hard Credit Check Affect Your Credit?

A hard credit check can negatively impact your credit score. The good news is that there are things you can do to minimize the damage.

When you apply for a loan or a new line of credit, the lender will almost always perform a hard credit check. This check requires the lender to request your credit report from one or more of the three major credit bureaus (Experian, TransUnion, and Equifax).

Lenders use hard credit checks to assess your creditworthiness—that is, how likely you are to repay the loan or credit line. The information in your credit report helps the lender determine whether you’re a good candidate for the loan and what interest rate to offer you.

A hard credit check can ding your credit score by a few points, but the effect is usually temporary. In most cases, the drop in your score is minimal—generally, less than five points—and will rebound after a month or two.

If you’re worried about the impact, a hard credit check will have on your credit score. There are a few things you can do to minimize the damage.

First, ensure you only apply for loans or credit lines for which you’re likely to be approved. Every time you submit a loan application, the lender performs a hard credit check, which can damage your score. So, it’s important to only apply for loans or credit lines that you have a good chance of being approved for.

Second, try to space out your loan applications. If you’re shopping around for the best interest rate, submitting multiple applications in a short time is okay. However, if you’re not sure you’ll be approved for a loan, it’s best to space out your applications. That way, the hard credit checks will have less of an impact on your score.

Finally, make sure you keep up with your payments. A history of on-time payments can offset the negative impact of a hard credit check. So, if you end up with a loan or a new line of credit, make sure you make your payments on time and in full each month.

Hard credit checks are a necessary part of the lending process. However, there are things you can do to minimize the impact they have on your credit score. By following the tips above, you can help ensure that a hard credit check won’t have a lasting effect on your credit.