Free credit reports are important. They make it easy and free for you to review your credit reports and therefore improve your creditworthiness and behavior. However, getting a free credit report might be great and helpful but what are the consequences involved? Will free credit report after your credit score? These are some of the questions that run through the minds of most Americans when they go for a free credit report.
The Credit Inquiries
The kind of inquiry you make on your credit history determines the effect it will have on your credit score. There are basically two types of inquires: hard and soft inquiry.
A hard inquiry occurs when you apply for credit such as apply for loan, a credit card, mortgage or any other form of credit. During hard inquiry, the lender will pull your credit information and this has an effect on your credit score. It typically reduces your credit score.
On the other hand, a soft inquiry occurs when you request for your credit report. A free credit report is an example of a soft inquiry. As you can expect, a soft inquiry has no effect on your credit score. In other words, soft inquires do not increase or decrease your credit score.
Positive Effect on Your Credit Score
As a matter of fact, your credit score is unaffected by getting a free credit report. In fact, getting a free credit report indirectly improves your credit score.
Several studies have confirmed the effect of frequently checking credit reports on credit scores and credit behaviors. Studies conclude that people who check their credit reports often are likely to improve their credit behavior. A free credit report provides an opportunity for you to check your credit report as often as possible. This will help you to keep an eye on your credit report as easily as you can and therefore improve your credit score.
Checking your credit report frequently will make you more conscious of your credit behavior. If you are really serious with your credit behavior, you may be able to fork over some cash to check your credit report. However, with a free credit report, anybody can know his credit standing and you don’t need to pay a dime to review your credit reports.
Why Your Credit Score Matters
Your free credit report contains an overview of your credit history. It may or may not contain your credit score. In fact, free credit reports obtained from the government authorized site, annualcreditreport.com does not contain your credit score. You will have to pay some fees to get the credit score.
Thankfully, you can get a free credit report and score form third-party sites like credit.com. Improving your credit score is of paramount importance. This is because your credit report and score affects most things in your life from your apartment request and your mortgage rates to your job application and credit card approvals. You can get a free credit report not only from annualcreditreport.com but also from your bank, state and even free websites.