There are good and bad credit inquiries, some can take points
off your credit score with each inquiry, while others have no
effect at all. Too many of the bad inquiries and your credit
can be destroyed, taking with it your chances for receiving a
home, mortgage or personal loan.
Think back to all of the times you went out shopping for items
like a new car, cell phone, home, apartment or insurance
company. Each of these companies probably pulled your credit
report and took a few points off of your credit score at the
same time.
Although most credit inquiries take less than five points each
time, this can still add up- especially if you have more than
a few inquiries. Losing points on your credit score can cost
you a lot of money over the years because you'll end up paying
higher interest rates and annual fees.
If you're out shopping for cars and have applied at a few
different dealerships in a two-week span, you don't have to
worry about your credit score dropping each time. You should
only get up to a five point deduction because credit bureaus
will count all inquiries in this time frame as one. But if
you're out shopping in a two week span for unrelated items-
say a new car and an apartment- credit scoring will be
affected with each inquiry.
Credit scoring is not affected at all if you are making
inquiry as to where you stand. Whenever you order reports
or request your one free copy per year, no points are taken
off your credit score. You are not penalized for wanting to
know what your credit history looks like, so take advantage
of this. You should always know what your credit score is
because it will give you a better idea of your chances for
credit and loan approval. It will also alert you to fraud or
any potential mistakes listed on your credit report if you
experience a sudden point drop for reasons unknown to you.
Credit inquiries will remain on your credit report for up
to two years. After this time period has passed, you can
request they be removed. You can contact each of the three
major credit bureaus- Equifax, Experian and TransUnion- to
have this done.
To keep your credit in good standing, pay your bills
religiously each month, keep your balances down and keep your
credit inquiries to a minimum. Doing so will ensure lenders
view you as someone they would be glad to do business with,
rather than a huge credit risk.
Article written by Dennis T. Cary. |
