There are two types of credit checks:

Soft Inquiry – Doesn’t affect your credit score (e.g., checking your own score)
Hard Inquiry – May lower your credit score slightly (e.g., applying for a loan)

This report is pulled from one or more of the three major credit bureaus:

Equifax
Experian
TransUnion

What it Includes:

Credit accounts (credit cards, loans, mortgages)
Payment history (on-time or missed payments)
Credit balances and limits
Length of credit history
Public records (like bankruptcies or collections)
Credit inquiries (who has checked your credit recently)

Why Credit Checks Happen:

Lenders check your credit when you apply for loans or credit cards
Landlords may use it to evaluate rental applications
Employers (in some industries) use it during hiring
Utility companies or cell phone providers check credit before starting service

Good vs. Bad Credit

Good Credit Helps You:

Get approved for credit cards and loans
Secure lower interest rates
Rent apartments more easily
Qualify for better insurance rates

Bad Credit Can:

Limit your loan or credit approvals
Lead to higher costs over time
Hurt job prospects (in some industries)
Increase security deposits for utilities or rentals

Credit Score Range:

800-850: Excellent
740-799: Very Good
670-739: Good
580-669: Fair
Below 580: Poor/Bad

Meaning:

Excellent: Very low risk to lenders; best interest rates and credit offers
Very Good: Good chances for approvals; favorable loan terms
Good: Average borrower; may still qualify for most loans with decent terms
Fair: Higher risk; may face higher interest rates or need a co-signer
Poor/Bad: Difficult to get approved; high interest rates; considered high risk