Credit scores can drop if you check them too often, but…

By Lee Cleveland - January 7, 2022

CATONSVILLE, Md. — Can your credit scores drop if you check them too much?

Researchers found that it all depends on the state of your credit and finances.

According to a new study, people with declining credit can expect to lose a few points if they check their scores too often. Conversely, those with healthy credit scores can actually add a few points by checking their status regularly.

Hence, if your credit score is 790 and you want to raise it to 800 easily and without having to pay off an account in full, try reviewing your credit status more often.

So, how were the aforementioned facts attained?

Researchers examined a financial tracking website that allows customers to view their credit reports once per month for free. Interestingly, they found 38 percent of those users didn’t return after obtaining their first credit report.

“We wanted to find out why those users did not return,” says Jessica Fong from the University of Michigan in a media release.

“So, we decided to focus our research and answer two questions: What drives an individual’s demand for information? And, how does information affect outcomes?”

Who wants to be reminded of bad news or something negative?

So, you’re seeing your cousin for the first time in 5 years and she’s gained a bunch of weight – she doesn’t need you to remind her of that.

Perhaps it’s similar when people with already-low or decreasing scores access their credit status?

Data suggests consumers with low or declining scores were less likely to check their reports. Consequentially, those folks represented a big chunk of the 38 percent who failed to return to check their credit scores despite having free, once-per-month access.

And it can be a good thing when people with poor or declining scores choose to access their credit reports infrequently.

“On average, users who had declining credit scores prior to checking their credit report experienced a 23-point decrease in credit score after viewing their updated report, whereas users who had non-declining credit scores experienced a nine-point increase in their credit score after viewing their updated report,” Fong reported.

“It’s interesting that one of our findings is that avoiding information may actually be helpful to some users in increasing their credit score,” added co-study author Megan Hunter of Boston College.

“Avoidance of repeat exposure to a negative score may better allow them to concentrate on solutions and improvement.”

Researchers also suggest that consumer finance firms that frequently email customers with decreasing credit scores about free credit checks likely drive those folks away. Again, who wants to be reminded of bad news? Instead, they recommend such firms to focus on consumers whose credit is already solid or email everyone equally.

The study is published in the INFORMS journal Marketing Science.

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Credit Score Facts & Statistics 2021 from Upgraded Points

  • The average credit score in the U.S. is 716.
  • The average credit score for Americans ages 23 to 29 is 660.
  • 80- to 89-year-olds have the highest average credit score of 757.
  • Low-income families have a median credit score of 658
  • Asian Americans have the highest credit score of any race at 745.
  • Men hold a slightly higher credit score than women.
  • 23.3% of Americans have a credit score in the 800 to 850 range.
  • Your payment history accounts for 35% of your credit score.

Credit Score Stats from Fortunly

  • One in five Americans aged 20-29 don’t know their credit scores
  • More than 29.8% of Americans have a credit score of 680 or higher
  • 42.5% of America’s youth earning $49,999 or less per year have a credit score of 639 or lower, with only 24.6% reaching a score over 680
  • 51.2% of Americans renting property have no idea they can report rent and utility bill payments to improve their credit scores
  • Nearly one in two people don’t pay off their credit balances each month
  • Only 12% of the US population has a FICO score lower than 550
  • Americans owe more than $1.5 trillion in student debt