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

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2021 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.