What’s the logic behind a credit check making your credit score go down?
In: Economics
A credit check only makes your credit score go down if its a “hard” check made in preparation for getting a loan. It does that because “how much money has this guy borrowed” is part of your credit score, and getting a loan is a good indication that you’re going to borrow more money which should be taken into account. In addition seeking out several different kinds of loans is also corelated with default, which again is something the score wants to take into account.
The general idea: to a lender, based upon this one fact alone, someone who has recently applied for multiple new lines of credit may be more likely to default on a new line of credit than someone who hasn’t
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