If I order a copy of my credit report, will it hurt my credit scores?

When you get a copy of your credit report and/or monitor your credit, there is no impact on your credit or your score.  A credit inquiry is recorded on your credit report when a company reviews your credit report.  The name of the company and the inquiry date are included on the credit report.  Inquiries stay on the credit report for 24 months.  If you order a copy of your credit report, there is no impact.

Hard inquiries

There are two types of inquires: soft and hard.  Hard inquiries are initiated by the consumer (you), when you apply for credit.  Examples are applying for a vehicle loan, mortgage loan, home equity loan, bankcard, or retail credit card.  The exception is inquiries from collection agencies, which are considered hard inquiries.  Hard inquiries are included in scoring, but only for the most current 12 months.

Credit grantors consider hard inquiries as negative because you are seeking credit.  This is an indication that you are in the need for credit, which could result in overextending yourself.

Soft inquiries

Soft inquiries are not initiated by the consumer to obtain credit and are excluded from scoring. Which means that the scoring model does not included them. Applying for employment, insurance, or utilities (except for telecommunications) are considered soft inquiries. These are not initiated for the purpose of obtaining credit. These are only displayed on the consumer’s credit report, not on the report the lender receives.   In addition, these companies don’t report information to the credit bureaus.

Below is a list of soft inquiries and the reasons:

Account review/account management purposes which are initiated by the lender to monitor your account. Since you are their customer, they can do so.

Request by consumer to order their credit report or monitor their credit report.

Credit counseling purposes when you visit a credit counseling service to review your account and consult with you.

For employment purposes by the potential or current employer; you must give potential employers written permission to do so.

For Insurance purposes when you apply for insurance or your policy is renewed.

For skip tracing/locate purposes when a company is reviewing your credit report to find current information to locate you. This is usually because a bill is owed and past due and the credit can’t locate you.

For pre-approved offers for credit or promotional inquiries, these are usually credit card offers.

To apply for utilities such as electricity, gas, and cable. Cell phones and landlines (telecommunications) are excluded, they aren’t considered necessities, which I know most would disagree with this.

You are entitled to a free credit report annually from each of the three credit reporting agencies: Equifax, Experian and TransUnion through annualcreditreport.com. Fortunately, you are not penalized for reviewing or monitoring your credit report. Some monitoring sites are free and others aren’t. No matter how many times you order your credit report, your credit is not impacted.

Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.