How CreditWise May Affect Your Credit Score

Using a credit monitoring tool like CreditWise might seem like it would affect your credit score, but it doesn't. It uses a soft inquiry, which has no impact on your score.

1. Initial Check: Signing up for CreditWise triggers a soft inquiry on your credit file. This type of check is for personal review purposes and, unlike a hard inquiry from a lender, does not lower your credit score.
2. Ongoing Monitoring: The service allows you to view your VantageScore 3.0 credit score and reports from TransUnion and Experian. This regular monitoring helps you track changes and understand your credit standing without any negative consequences.
3. Identifying Key Factors: Through the platform, you can identify specific elements affecting your score, such as your payment history, credit utilization ratio, or any potential errors on your report. This awareness is the crucial first step toward making improvements.
4. Informed Financial Decisions: The insights gained from CreditWise can guide your actions. For example, paying down a high-balance credit card to lower your utilization or disputing an incorrect item can, over time, positively influence your credit score.
5. Simulating New Credit: The tool may offer a simulator to estimate how applying for new credit could change your score. If you act on this and apply for a loan or card, the lender's subsequent hard inquiry will cause a temporary dip in your score.

How Much Will CreditWise Affect Your Credit Score?

Using CreditWise itself won't directly lower your credit score. However, there are a few key factors to consider when using the service to monitor your financial health.

• Soft Inquiries Only. CreditWise performs soft inquiries to check your credit. These checks do not affect your credit score, unlike hard inquiries which can cause a temporary dip.
• Monitoring, Not Building. The tool is designed for monitoring your existing credit profile. It provides insights but does not offer features to actively build or improve your credit score directly.
• VantageScore Model. CreditWise uses the VantageScore 3.0 model to calculate your score. Many lenders use FICO scores, so the number you see may differ from what a lender sees.

How You Can Avoid Credit Wise Affecting Your Credit Score

Understanding Soft Inquiries

CreditWise performs a "soft inquiry" to access your credit information. Unlike a "hard inquiry" from a loan application, this type of check is only visible to you and does not affect your credit score. It's designed for personal monitoring without any negative impact.

No Special Actions Required

Because CreditWise uses soft inquiries, you don’t need to take any special steps to protect your score. The service is built to be a helpful monitoring tool that you can use freely without fear of it lowering your credit rating. It's inherently safe for your credit health.

Focus on Positive Credit Habits

Rather than concern yourself with the tool's impact, focus on proven credit-building behaviors. Timely bill payments, maintaining low credit utilization, and limiting new credit applications are the actions that truly shape your score. These habits are what lenders actually evaluate.

Ways to Improve Your Credit Score

Improving your credit score is always possible with consistent, positive financial habits. By following a few proven methods, you can see meaningful changes to your score in as little as three to six months.

• Monitor your credit reports. Regularly check your reports from all three major bureaus to spot and dispute inaccuracies or signs of identity theft.

• Set up automatic bill payments. Ensure you never miss a due date by automating payments, as your payment history is the most significant factor in your score.

• Reduce your credit utilization. Aim to keep your credit utilization ratio below 30% by paying down balances or requesting credit limit increases.

• Become an authorized user. You can be added to the credit card of someone with a strong payment history, allowing their good habits to reflect on your credit profile.

• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as credit cards and installment loans.

• Limit hard inquiries. Avoid applying for too much new credit in a short period, and when rate shopping for a loan, do so within a 14-30 day window to minimize the impact.

The Bottom Line

Using CreditWise from Capital One will not hurt your credit score. The service uses a soft inquiry to check your credit report, which does not impact your score like a hard inquiry.

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.