Don't fall for these 2 myths about what hurts your credit score


Even a slight dip in your credit score can cost you thousands over the life of a loan, so establishing and maintaining strong credit is important. That said, don't believe everything you hear about what will and won't hurt your credit score. You might be avoiding smart moves that could actually help you save money.

Here are two credit myths you shouldn't believe:

Myth 1: Checking your credit report hurts your score

About 1 in 5 credit card users mistakenly believes checking their credit report could cause their score to drop, according to a 2018 survey from Discover. Not true. You can safely review your own credit reports as often as you'd like.

"When you check your own credit report, it will not hurt your credit scores, as long as you're not having a friend at a car dealership or mortgage broker pull it for you," credit expert John Ulzheimer told Grow earlier this year.

The only kind of credit check that hurts your score is when a lender reviews your credit as you apply for a new loan. That so-called "hard pull" can have a small and usually temporary negative affect.

Read more: 2 ways to check your credit score for free

This is how your credit score is actually measured

Video by David Fang

Myth 2: Shopping around for a mortgage hurts your score

When you apply for a mortgage, lenders will look at your credit to assess what kind of interest rate you're offered — and the best way to get a competitive rate is by shopping around. Even so, experts say, there is a misconception that shopping around for mortgages will be seen as multiple requests for new credit, hurting your credit score at a time when you need it to be at its best.

The reality is that applying for several loans will be treated as a single inquiry on your credit report.

"There are no downsides to shopping around because [scoring models like] FICO and VantageScore will presume you're shopping around for the best rate rather than applying for multiple loans," Ulzheimer told Grow earlier this year.

Read more: How you can save up to $500 per month on your mortgage payments