On The Money

Do Credit Scores Go Down While You’re Watching?

Credit ScoresAs soon as the Brexit results came in, marketers dreaded even looking at their screens because the numbers would go down every time they did. This is a fear that’s become all too real for our friends from across the pond. But, would you believe that there some people on this side of the Atlantic that think the same thing can happen to their credit scores?

Are You a Credit Medusa?

There is an urban legend going around that says people run the risk of lowering their own credit score if they decide to look at it by themselves. It turns every person into a financial medusa that would lead credit scores to their demise.

This myth makes no sense considering companies exhaust all their means to help clients calculate credit scores and explain their meaning. Why would they waste time doing all of that if the value goes down as soon as someone looks at it?

The best explanation for the proliferation of this myth is the confusion people have when it comes to soft and hard inquiries. These are the two different ways any interested party can request for credit information.

Asking Hard or Soft

A soft inquiry is when a potential employer asks for your credit history as part of a background check, or when you check it for yourself. This is a simple check that anyone can perform even without the owner’s permission – it does nothing to the value of the credit.

A hard inquiry, on the other hand, is when a lender or a credit card company takes a look at the information. The difference in this case is that these reviews happen specifically to judge the value of a person’s credit before authorizing a loan. This is the kind of inquiry that can lower credit scores, but it can only happen with the owner’s permission.

This is just one among the many falsehoods that manage to creep around client circles. It’s a bit of a concern to think that something as silly as this is taken seriously. But, as long as people keep writing about it, there’s always a chance someone will educate themselves on whether what they hear is true or not.