How CreditWise May Affect Your Credit Score

It's a common myth that checking your credit hurts your score. CreditWise uses a "soft inquiry," which doesn't impact your score, unlike the "hard inquiry" from a loan application.

1. Initial Check: Using CreditWise to view your credit score and report from TransUnion and Experian initiates a soft inquiry. This action does not lower your credit score and is invisible to lenders.

2. Gaining Insights: The platform provides a detailed analysis of the key factors influencing your score, such as payment history, credit utilization, and derogatory marks, helping you identify areas for improvement.

3. Informed Financial Actions: Based on these insights, you might take action. For example, you could dispute an error on your report, pay down a high-balance credit card, or decide to apply for new credit.

4. Indirect Score Impact: The actions you take—not CreditWise itself—are what affect your score. Applying for a new loan creates a hard inquiry, potentially lowering your score slightly, while paying down debt can improve your credit utilization and raise it.

5. Ongoing Monitoring: By regularly using CreditWise, you can monitor how your financial decisions impact your credit over time, allowing you to build a stronger credit history through informed management.

How Much Will CreditWise Affect Your Credit Score?

Using CreditWise does not directly raise or lower your credit score. However, how you use the information provided by the service can indirectly influence your financial standing. Here are a few things to consider:

• Soft Inquiries Only. CreditWise uses soft inquiries to access your credit information, which do not affect your score. This is different from hard inquiries from loan applications, which can cause a temporary dip in your score.
• Monitoring for Accuracy. The service helps you monitor your credit report for errors or fraudulent activity. Disputing and removing inaccuracies with the credit bureaus can positively impact your score.
• Informed Financial Decisions. The insights gained from CreditWise can prompt positive behavioral changes, like paying bills on time. These responsible financial habits are what ultimately build and improve your credit score over the long term.

How You Can Avoid Credit Wise Affecting Your Credit Score

Understand Soft Inquiries

CreditWise utilizes "soft inquiries" to access your credit information. Unlike "hard inquiries" from loan applications, these checks do not impact your credit score. Knowing this difference is crucial for using monitoring tools without worry about negatively affecting your credit standing.

Use for Monitoring, Not Applications

Use CreditWise solely for its intended purpose: monitoring your credit. While the service itself won't lower your score, applying for credit offers you see within the app may trigger a hard inquiry from the lender, which can impact your score.

Check Reports Directly

You can also monitor your credit by requesting free reports directly from the major bureaus—Equifax, Experian, and TransUnion. This method also uses soft inquiries, ensuring your score remains unaffected while you stay informed about your financial health.

Choose the Right Card to Credit Wise

No matter where your credit score stands today, improving it is always possible with consistent effort and the right strategy. With a few proven methods, you can see meaningful changes within a few months.

• Monitor Your Credit Reports. Regularly obtain your free credit reports from the three major bureaus—Experian, TransUnion, and Equifax—to check for and dispute any inaccuracies that could be hurting your score.
• Set Up Automatic Payments. Your payment history is the single most important factor, so ensure you never miss a due date by setting up automatic payments for all your bills.
• Lower Your Credit Utilization. Aim to use less than 30% of your available credit. You can achieve this by paying down balances or requesting a credit limit increase on existing accounts.
• Become an Authorized User. If a trusted family member has a credit card with a long history of on-time payments, ask them to add you as an authorized user to help boost your score.
• Diversify Your Credit Mix. Lenders like to see that you can responsibly handle different types of debt, so having a mix of revolving credit (like credit cards) and installment loans (like auto loans) can be beneficial.
• Limit Hard Inquiries. Each time you apply for new credit, it can cause a small, temporary dip in your score. Space out your applications and use prequalification tools when shopping for loans to avoid unnecessary inquiries.

The Bottom Line

Using CreditWise from Capital One will not hurt your credit score. The service performs a soft inquiry, which doesn't impact your score, allowing you to monitor your credit risk-free.

Frequently Asked Questions

Does using CreditWise hurt my credit score?

No, using CreditWise does not impact your credit score. It performs a soft inquiry, which isn't visible to lenders and has no effect on your credit history.

How often does CreditWise update my score?

CreditWise provides weekly updates to your VantageScore 3.0 from TransUnion. This allows you to monitor your credit health and track any changes on a regular basis.

Is the score from CreditWise the same as my FICO score?

No, CreditWise uses the VantageScore 3.0 model. While insightful, most lenders use FICO scores for credit decisions, so the numbers may not be identical.