Facts About Inquiries Into Your Credit History

A portion of your credit score is based on credit inquiries into your accounts. About 10%.

All lenders run a credit history report on you when you are applying for a loan. It could be for any type of loan: auto, dept store credit, new mortgage , re-fi etc..

Credit Inquiries Have Little Impact - Most of the Time

The effect of an additional credit inquiry to your account will be minimal - usually less 5 points.

Borrowers with established credit of over 3 years need not worry about opening an occasional accout.

However, if you have very few credit accounts and/or have not established a long credit history, multiple inquiries could be a red flag and cause your credit score to drop as much as 20 points.

A flurry of new credit applications from a borrower is perceived as higher risk by the credit bureaus. And rightly so…Fair Issacs states . "People with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports…"

Tip: Establish credit slowly - don't apply for multiple lines of credit all at once.

Some Credit Inquires Don't Count At All

You will not lose points on your credit report in these credit inquiry situations:

• If you order your own credit report
• Applying for pre-approved credit ( all the unsolicited mail offers you may be receiving)
• Routine account reviews by current creditors
• Any inquiry originating from an employer or an inquiry that is employer based

Tip: Understand that these credit inquiries will not affect your credit score.

Good News! Rate Shopping Will Not Affect Your Credit Score

Your ready to buy a home - do you use the first lender you talk to?

Why not shopp around for the best rate?

Your credit report will not be affected by multiple inquiries so you can compare rates without losing points on your credit report.

Fair Issacs allows multiple credit inquiries for those applying for an auto or mortagage loan to be counted as "ONE" inquiry within a 45 day period.

Also if you find the loan within 30 days no points will be deducted from your score.

Tip: Plan your auto and mortgage loan shopping within this 45 day grace period.

* please note you may be charged an application fee at each lender.