Do you know what your credit score is? If you don’t, you’re not alone. But knowing your credit score and how it’s calculated can help you stay on top of your financial health.

Your credit score is a 3-digit number that shows how likely you’ll pay your bills on time. Ranging from about 300 to 850, your credit score can affect whether you’re approved for a loan, get good interest rates, or receive special product offers from lenders. In some cases, when your credit is checked, this may lower your credit score. But in other cases – like checking your own credit score – your credit score won’t be impacted. To maintain a good credit score, make it a habit to know what your credit score is and how it’s calculated. 

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What factors affect your credit score?

Not sure how your credit score is calculated? Here are the factors that affect your credit score.


As you can see, your credit score is affected by payment history, credit utilization, credit history, public records, and — the focus of this article — credit inquiries.

Is your credit score low? Discover how to start rebuilding credit.

What is a credit inquiry?

When companies, creditors, or lenders make a request to view your credit reports, this is called a credit inquiry. Credit inquiries can show up on your credit report and may affect your credit score. For example, if you’ve applied for multiple credit cards in a short period of time, multiple credit inquiries will show up on your credit report. This could raise a red flag to potential lenders about your credit. There are two types of credit inquiries: soft inquiries and hard inquiries...

Hard inquiries vs. soft inquiries

When a creditor or lender needs to check your credit score, they’re making an inquiry into your credit. But not all inquiries will show up on your credit report and lower your credit score. Let’s take a look at the difference between hard credit inquiries and soft credit inquiries. 

Hard inquiries

Let’s say you’ve applied for a new credit card – one that has an annual fee and a few requirements. To approve you for this credit card, the bank needs to check your credit. They’ll do this by making a hard credit inquiry. This hard credit inquiry will show up on your credit report. Besides credit card applications, hard credit inquiries are also made for:

  • Student loans
  • Personal loans
  • Car loans
  • Mortgage applications

Soft inquiries

Now let’s say you’ve applied for a loan – one your bank has sent you a preapproved offer for. While the bank may still want to look at your credit report, they’ll be making a soft credit inquiry because they preapproved you for this loan. A soft inquiry won’t affect your credit score and won’t show up on your credit report. Besides preapproved credit, soft credit inquiries are also made for:

  • Insurance applications
  • Employment background checks
  • Rental housing applications

When multiple hard inquiries don’t impact your credit score

Though multiple hard inquiries can affect your credit score, there are certain times when they won’t all impact your credit score. Generally, if multiple hard inquiries are made for the same type of loan within 14 to 45 days, they’ll only be counted as one hard inquiry. For example, if you’re applying for several mortgages in an effort to get the best rate, the hard credit inquiries made for these mortgage applications will only count as a single inquiry. 

Credit cards are an exception though. If you apply for multiple credit cards in a short period of time, each hard inquiry will impact your credit score. 

How to check your credit score without harming it

If you haven’t checked your credit score before, now’s a better time than ever to take a peek. Knowing your credit score will not only give you insight into whether you’re a good candidate for loans, but can also paint a picture of your overall financial health. And don’t worry, checking your own credit score won’t hurt your credit score because it’s considered a soft credit inquiry.

Ready to check your FREE credit score? Head to Credit Karma to get your credit report for free in Canada. Credit Karma can help you monitor your credit by sending you monthly updates and personalized tips on how to improve your credit score. It’s free to sign up – so what are you waiting for?

Fresh Start Finance serves Canadians facing all types of credit situations with practical advice and credit-building solutions. We also offer quick-and-easy secured and unsecured installment loans to help you take those first steps to a better financial future. Apply today to see how we can help!