Does Checking Your Credit Lower Score Lower It?

Your credit score is an important financial metric that can have a significant impact on your life. Good credit makes it easier to qualify for loans and makes borrowing money cheaper by reducing the interest you pay. If you have poor credit, you’ll have to pay higher interest rates when you get a loan or might have trouble borrowing money at all.

Checking your credit report regularly can help you have an idea of the loans and credit cards you can qualify for, as well as what you need to do to boost your score. It’s also a good way to monitor for identity theft or to notice incorrect information on your credit report.

When a lender checks your credit, it usually reduces your credit score by a few points. However, checking your score on your own is typically safe. Let’s explore why.

What Is a Credit Inquiry?

Your credit report contains a history of your interaction with credit and debt. That includes information about your history of making on-time versus late payments, the amount of debt you have, how many loans and credit cards you have open, and recent applications for credit.

When you apply for a credit card or a loan, the lender usually reaches out to one of the three major credit bureaus — Experian, Equifax, and Transunion — to ask for a copy of your credit report. The lender uses the information in that report to make its lending decision and to set the interest rate if it decides to offer a loan.

The credit bureau that supplied your credit report makes a note of that application on your credit report. Other lenders who request a copy of your credit report from that credit bureau can see your recent application for a loan through that note.

Hard Inquiries vs. Soft Inquiries

When a lender asks a credit bureau for a copy of your credit report to make a lending decision, that’s called a hard inquiry. Hard inquiries show up on your credit report, and other lenders that check your credit can see hard inquiries in your credit history.

Lenders don’t check your credit only when you apply for a new loan. Lenders can check their customers’ credit at any time and often do so when the borrower asks for an increased credit limit or as part of regular risk assessments of their borrowers.

Individuals can also check their own credit reports using the many free credit tracking apps and websites on the market. These apps need to reach out to the credit bureaus to request copies of customers’ credit reports, but aren’t using those reports to make lending decisions.

In general, when you ask a credit bureau for a copy of your own credit report, it’s counted as a soft inquiry. Occasions when a lender checks someone’s credit to pre-approve them for an offer or as part of regular risk assessments — rather than as part of an application for a new loan or credit card — also count as soft inquiries.

Soft inquiries do not appear on credit reports, which means they don’t affect credit scores. This means that you can safely check their own credit reports without having to worry about damaging your credit.

How Credit Inquiries Affect Your Credit

Each hard inquiry on your credit report drops your score by a few points, usually between five and 10 points. One hard inquiry won’t have a large impact on your score, but they can quickly add up, so having lots of inquiries on your report can really damage your score.

This is because frequent applications for loans are a red flag for lenders. Someone who needs to borrow money repeatedly is likely to be having financial difficulties, meaning they’ll struggle to repay their loans.

The impact of each credit inquiry decreases over time. After a few months, an inquiry’s impact is relatively small and is usually offset by other positive factors on the credit report.

Credit inquiries stay on a credit report for two years, after which they fall off the report. That means that each inquiry only affects a person’s credit score for a maximum of two years.

Reducing the Impact of Credit Inquiries

People who are applying for large loans, like mortgages or auto loans, often want to shop around and get offers from multiple lenders so they can find the best deal. Even a small difference in the interest rate on a large loan can save thousands of dollars over the life of a mortgage, so shopping around is more than worth the effort.

Credit bureaus and FICO, the company behind the most popular credit scoring models, understand the importance of rate shopping, so most scoring models account for it when generating your credit score.

Depending on the model used, all credit inquiries for loans like mortgages, auto loans, or student loans that happen within a 14- to 45-day period are combined when calculating credit scores. If someone applies for four mortgages in a week, it will only count as a single hard inquiry.

That means you don’t have to worry about tanking your credit by shopping for the best interest rates when applying for a large loan.

Does Checking Your Credit Lower Your Credit Score?

The majority of credit monitoring apps, websites, and services use soft inquiries to check your credit report and provide that information to you. That means it’s safe to check your credit using one of these services.

Credit bureaus only take note of hard inquiries into your credit by lenders making lending decisions. Soft inquiries do not impact your credit score or appear on your credit report.

Final Word

Healthy credit is an essential part of healthy finances. Your credit impacts your ability to borrow money and how much interest you have to pay.

If you want to keep track of your credit score, there are many services you can use to help, all without impacting your credit. One way to keep your score high is to only apply for loans and credit cards that you need, which reduces the number of inquiries that show up on your credit report.

Source: moneycrashers.com

Cord-Cutters Guide: The Best Alternatives to Cable TV

Maybe you first heard the term whispered in hushed corridors at work or in a back-alley near your house, but now there’s no escaping the fact that “cord cutting” has gone mainstream. And it’s no wonder why. The monthly cost of cable TV in this country now averages more than ever before: a whopping $123 per household. But thanks to à la carte streaming services and the disruptive technology that’s taken over the living room in recent years, it’s easier than ever to save serious cash. Cancel your cable subscription, and join the growing ranks of cord-cutters streaming their shows.

Four out of five Americans still pay cable companies for hundreds of channels they’ll never watch. You don’t need to be one of them. Here’s what you need to know about seeing the shows you love without paying an arm and leg.

Cord cutting 101

Although millennials are leading the charge in the cord-cutting movement, anyone with a decent Wi-Fi connection can take advantage of the many available cable TV alternatives. And the soaring number of streaming services on the market means you can watch just about any TV show and sporting event in existence without going through a cable company.

If you watch a lot of shows on your local stations—think ABC, NBC, CBS and FOX—you can tune into them for free. These channels are publicly broadcast and the signals are easy to pick up in most metropolitan areas. All you need is a good HD antenna, which you can score for under $40 on Amazon. Depending on the terrain in your area and your proximity to TV towers, one type of antenna might be better for you than another. But once you’re set up, you’ll be able to enjoy the latest episode of Modern Family with the same crisp picture you were getting through your cable company, minus the monthly bill.

"À la carte streaming services and the disruptive technology taking over the living room make it easier than ever to save serious cash." MintLife Blog

Living the stream

Unless you’ve been held captive in an Indiana bunker for the past 15 years, you likely already know about the three biggest names in streaming: Netflix, Hulu and Amazon Prime. Each of these services lets you watch hundreds of movies and television shows plus tons of original content you won’t find anywhere else. Both Hulu and Amazon offer a large selection of TV shows—with new episodes available a day after they air on cable—while Netflix has a vast library of movies and binge-worthy original series awaiting your eager eyeballs.

Aside from those streaming behemoths, an increasing number of cable channels have launched their own independent services. HBO Now is at the high-end of this category, but many stations offer the ability to stream their shows for free, albeit with a few commercial breaks. And then there’s Dish Network’s newly launched Sling TV service, which streams a variety of live cable channels, including ESPN, for $20 per month.

Plus, there are more niche streaming services, such as MUBI, which focuses on independent and foreign films, and the forthcoming FilmStruck platform, which will soon showcase an extensive library of cult-classics and art-house flicks.

With the exception of Sling TV and HBO Now, the latter of which is available for $15 per month, prices for these services start at under $10 apiece. It’s easy to mix-and-match providers as none of these companies require contracts. You can even share login info with a friend down the block or sibling on the other side of the country, without worrying about anyone getting on your case.

Think outside the (cable) box

A ton of devices are available to help you cut the cable, with more tools debuting all the time. As of now, there are basically two routes you can choose: streaming sticks or streaming boxes.

Streaming sticks, which include the Chromecast, Amazon Fire Stick and Roku Streaming Stick, aren’t much bigger than a pack of gum, and they plug right into your TV’s HDMI port. You can then use your smartphone, laptop or—in Roku’s case—a remote control to launch hundreds of steaming apps. These devices are available for well under $50 apiece, and, on their own, don’t require a monthly fee.

Streaming boxes, on the other hand, such as Apple TV, Android TV and the Roku Player, as well as newer Xbox and PlayStation video game consoles, offer all of the advantages of the streaming sticks, plus the ability to install more apps. These boxes vary in price, but again, aren’t tied to any monthly fees. For serious TV watchers interested in cutting the cord, these boxes are the way to go.

Breaking the news

When you’re ready to cut the cable, invest the money you save on boosting your internet speed. To get the highest quality picture with the least amount of buffering, you need a connection that’s at least 10 Mbps.

Another way to shave a few bucks off your monthly bill is to shell out some money for a modem of your own. Many cable companies charge a monthly fee for renting a modem, but in the long run, it’s far more economical to buy one outright.

Are your utility bills bogging you down? Embrace the cord-cutter lifestyle and never pay for cable again. Not sure where you stand financially? Sign up for a free Mint.com account and get an instant overview of your money. See you on the couch!

List of cable TV alternatives

Streaming service

Monthly fee

Known for

Netflix

$7.99

TV shows, movies, and Netflix exclusives
Hulu

$7.99

New TV episodes a day after they air on cable
Amazon Instant Video

$8.99

Hundreds of old and new movies and shows
HBO Now

$14.99

First-run films, Game of Thrones
Showtime

$10.99

Original series (Homeland, Masters of Sex)
STARZ

$8.99

Modern movie library and exclusive originals
CBS All Access

$5.99

7,500 episodes of classic and new CBS shows
MUBI

$5.99

Cult-classics, foreign and independent films
Sling.TV

$20

Dozens of live cable channels, including ESPN
Crackle

FREE

Funny, feel-good shows and movies
FilmStruck

TBD

Turner Classic Movies and Criterion Collection

Streaming sticks and boxes

Device

Price

Known for

Chromecast

$30

Stream video from your laptop or smartphone
Roku Streaming Stick

$50

Portable tool with tons of popular apps
Roku Player

$50-$100

Enhanced picture quality, solid remote control
Amazon Fire Stick

$40

Best for users in the Amazon ecosystem
Apple TV

$149

Easiest way to play iTunes purchases on your TV
Android TV

$100

Access Android apps, Chromecast built-in
XBOX One or PlayStation 4

$200-$400

Play games, some streaming services built-in
Learn more about security

Mint Google Play Mint iOS App Store

Source: mint.intuit.com