Too Many Credit Inquiries

Before you run your credit inquiry with another company, find out how this can negatively affect your credit score.

Most people shopping around for a loan, say to buy a new car, will call around to many car dealers and give their credit information. These dealers, in turn, run your credit and tell you “Yes” or “No”. The problem with this theory is that running your credit every time will lower your score, and your chances of hearing that “Yes”. Imagine that every time you call one of those lenders, you’re shaving 10% off your score. These “hard” inquiries are the ones to look out for.

What you should actually do is get your credit report yourself first. You can get it for free online or sign up for one of the offers that give you access to it year-round. The annual credit report can only be downloaded once so if you lose it, you have to wait until the next year. With those credit companies that offer complete access, there’s obviously a monthly fee involved.

Once you have the credit report in your hand, make sure everything is correct. Many times things will be on the report, negatively affecting your score, and they really shouldn’t be there. If you have to dispute anything, take it up with one of the Credit Bureaus. If there is reason to believe the billing is in error, they will remove it from the report while it’s being disputed.

It’s important to get a letter from each disputing company. Then, when you’re ready to get that loan, you have proof that some of the bad credit on your application is being repaired. This can increase your score up to 25 or 30%. Then you must check back in a couple months to make sure that these marks were actually removed.

There can be other inquiries to your score which don’t affect it. Companies that may want to send you credit card offers or other solicitations will pull your credit first. This is legal and it doesn’t do anything to your score.

For additional information on credit cards or related topics please visit our library of credit card articles.