The three major credit bureaus, Equifax, TransUnion and Experian, use a complicated system to determine your overall credit report. The credit bureaus consider several factors, including how many times you apply for new credit. These applications, known as inquiries, may come from a variety of sources, not all of which count against you.
What Are Inquiries?
Anytime you apply for a new credit card, personal loan, auto loan or mortgage, the lender pulls your credit report, which results in an inquiry. The credit bureaus keep a record of all of your credit inquires on your credit report. Potential employers and landlords may also check your credit report. Several credit inquiries may cause your credit score to drop.
Credit Checks That Affect Your FICO Score
Certain credit inquiries, known as "hard" inquiries, show up on your credit report. Any time you apply for a new credit card, mortgage or loan, you will receive a credit inquiry mark on your report. You may also get a credit inquiry when you request a credit limit increase on your credit card. Typically, the credit card company will pull your credit report again to determine your eligibility for a credit limit increase.
Credit Checks That Do Not Affect Your FICO Score
Not all inquiries result in a new listing on your credit report. Checking your own credit does not affect your credit score. In some instances, applying with multiple financial institutions within a short time will only count as one inquiry on your credit report. For example, if you apply with several mortgage companies, auto loan companies, or student loan companies within a one-month period, the credit bureau views this as rate shopping and does not count every inquiry against you.
Credit Inquiries' Affect on Your FICO Score
Credit inquiries have a small impact on your FICO score in comparison to other factors, such as payment history and overall debt. New credit applications make up only 10 percent of your credit score, according to Bankrate. Having several applications for credit cards and loan products in a short time, however, may make you seem a high risk to some creditors.
Removing Incorrect Credit Checks
If credit inquiries that you did not authorize appear on your credit report, you have the right to dispute the information with the credit bureaus. The bureaus will research your claim and correct or remove the inquiry, typically within 30 days. You may find a list of credit inquiries on your credit report.
0 comments:
Post a Comment