How CreditWise Can Affect Your Credit Score

It’s a common myth that checking your credit harms your score. Fortunately, using CreditWise doesn't affect your credit score because it performs a "soft inquiry," not a "hard inquiry."

1. Monitoring Your Report: You begin by using CreditWise to view your credit report and score. This initial step is a soft inquiry and does not change your score in any way.
2. Identifying Key Factors: The service helps you identify what's influencing your score. You might discover a high credit card balance is negatively impacting your credit utilization ratio, for example.
3. Taking Corrective Action: Based on these insights, you take action. This could involve paying down the high-balance card or consolidating debt to improve your financial standing.
4. Lender Updates Bureaus: After you act, your lender reports the new, lower balance or paid-off account to the credit bureaus (TransUnion and Equifax) during their next reporting cycle.
5. Score Recalculation: The credit bureaus update your file with this new information. Your score is then recalculated, reflecting the positive changes you made based on the data from CreditWise.

How Much Will CreditWise Affect Your Credit Score?

While using CreditWise itself doesn't hurt your credit, several factors determine how the information you see relates to your overall financial health. Here are a few key things to keep in mind.

• Soft vs. Hard Inquiries. CreditWise uses a soft inquiry to check your credit, which has no impact on your score. This is different from a hard inquiry, which can temporarily lower your score when you apply for a loan.
• VantageScore Model. The platform provides your VantageScore 3.0, which is one of several scoring models. Lenders may use a different model, like FICO, so the score they see could vary from what CreditWise shows you.
• Monitoring vs. Building. CreditWise is a tool for monitoring your credit, not actively building it. Your score changes based on your financial actions, such as paying bills on time, which the tool helps you track.

How You Can Avoid CreditWise Affecting Your Credit Score

Leveraging Soft Inquiries

CreditWise exclusively uses soft inquiries to access your credit report. These types of checks are for personal review and are not visible to potential lenders. Since they are not associated with an application for new credit, they do not impact your credit score whatsoever.

Monitoring vs. Applying

Remember that using CreditWise is for monitoring purposes, not applying for credit. The service provides you with information without signaling to lenders that you are seeking new debt. This distinction is why it avoids the hard inquiries that can temporarily lower your credit score.

Ways to Improve Your Credit Score

Improving your credit score is entirely achievable through consistent, positive financial behaviors, and you can often see meaningful changes within three to six months. By taking a few strategic steps, you can build a stronger credit profile and improve your financial health.

• Monitor your credit reports. Regularly check your reports from all three major bureaus—Experian, TransUnion, and Equifax—to spot and dispute any inaccuracies that could be hurting your score.
• Establish automatic payments. Since payment history is the most significant factor in your score, setting up automatic payments helps ensure you never miss a due date.
• Reduce your credit utilization ratio. Aim to keep your credit usage below 30% of your total available credit, as high utilization can signal financial risk to lenders.
• Become an authorized user. You can get a boost by being added to the credit card account of someone with a long history of on-time payments and low credit utilization.
• Diversify your credit mix. Lenders prefer to see that you can responsibly handle various types of credit, such as a mix of credit cards and installment loans.
• Limit hard inquiries. Applying for too much new credit in a short period can temporarily lower your score, so space out your applications whenever possible.

The Bottom Line

Using CreditWise from Capital One will not hurt your credit score. The service uses a soft inquiry to check your credit, which helps you monitor your financial health without any negative impact.

Frequently Asked Questions

Does using CreditWise lower my credit score?

No, using CreditWise will not lower your credit score. It performs a soft inquiry on your credit report, which does not impact your score whatsoever.

Is the score from CreditWise accurate?

CreditWise provides your VantageScore 3.0 from TransUnion. While this score is accurate, lenders may use different scoring models, so the numbers could vary slightly.

Can CreditWise help me improve my score?

Yes, CreditWise offers a credit simulator and personalized suggestions that can help you understand how certain financial actions might impact your credit score over time.