| Do Credit Inquiries affect my credit score? - Do credit inquiries affect my credit score? This is one of the most confused and commonly asked questions by consumers shopping for a mortgage. The answer to this question is yes and know. How can the answer be both you may ask? Applying for a lot of credit cards and such will result in a credit inquiry each time you apply. This will in turn result in a negative affect to your credit score. However, if you are shopping for a mortgage or an auto loan, the credit repositories realize that most people are applying with multiple companies to find the best deal out there and they will allow the consumer a 30 day window in most instances to shop around for a mortgage loan and have their credit pulled by as many mortgage companies as they want to find the best deal. All of these inquiries for a mortgage within that 30 day window (30 day window starts with first mortgage inquiry) will only count as one inquiry however for credit scoring purposes. All of the inquiries will still report to your credit report as inquiries so that you can always see who is pulling or has pulled your credit, they just simply will count as 1 inquiry for credit scoring purposes though. When shopping for a mortgage, be careful when using internet websites which promise to have "banks compete" or offer "up to 4 quotes from lenders". The number of inquiries to your credit report that these forms generate can be astonishing, literally dozens. Instead, consider inquiring with a mortgage broker, either via telephone or via an internet form which does not require your social security number. This way, you can shop hundreds of wholesale lenders with only a single credit inquiry, saving your credit score and your money over the long run. A lot of inquiries for things such as credit cards in a short period of time is definitely going to have a seriously negative affect on your credit score. Therefore, if you apply for a credit card every time you go somewhere just to get a cool free gift, this is going to negatively affect your credit and lower your credit score. Therefore, make sure you think before you apply to be safe. Having a lot of credit inquiries will increase your score. This indicates to lenders that you are considering changing your credit situation. Credit inquiries have an impact of 10% of your credit score. The maximum number of inquiries that can reduce your score is 10. Any inquiries in excees of 10 within a 6 month period will have no further impact on one's credit score. Credit inquiries stay on your credit report for 12 months and as they fall off your credit score generally will go up a point or two each time. However to many credit inquiries for high risk revolving accounts like department store cards and credit cards can cause a drastic drop in your credit score. Credit inquiries, when an accumulation occurs, can negatively impact your credit score. This means that if you apply for a lot of credit within a 90 day period of time, you will have a credit inquiry from each creditor that you applied with and this can negatively impact your credit score. During your refinance, it's generally good policy to not open any new lines of credit or apply for any loans. You do not want to have credit inquiries lower your score and disqualify you from the loan you are trying to obtain. |
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