Got Inquiries?

Join the club.  The list is usually long, intimidating, and most likely lowering your score unnecessarily.  The previous post discussed the main culprit (typically) of this score splicer-most of us know from experience the practices of car dealerships when financing your new or used auto.

To take it a step further is very easily understood and can save you thousands in interest alone.  There are two types of inquiries you may or may not be aware of.

Credit Clue #1 Hard inquiries are not penalized heavily against your score, until you have more than 6 over a 6 month time frame. Soft inquiries almost never hurt your score.

The credit system in place today allows everyone about one hard inquiry a month; apply for additional credit than 6 in 6 months and you can expect your score to drop about 10-15 points per inquiry. Even more if you are declined.  It is a viscous cycle, and takes discipline-higher inquiries=lower score=more declines.  Don’t get discouraged, because you can be proactive and get off the credit merry-go-round without expense!

However, to complicate this, inquiries can also post to your file even if you did not apply. Ever get an offer stating ‘You have been pre-approved”? These are meant to entice you, but don’t feel obligated or more likely, tempted.  This type is called a soft inquiry and almost never affects your score. When you look at your credit file from a credit monitoring service, it will also list this login as a soft inquiry. Makes sense to keep a watchful eye consistently doesn’t it?

Now for the good news…the credit reporting agencies (Big 3:  Experian, Equifax, and TransUnion) by law must report correct and factual data on any part of you file.  Mistakes not only happen, but are more common than not.  The powers that be were aware of this issue, and you can read about it by clicking here.

Also take note-any inquiry whether hard or soft should be removed unless the lender listed in the inquiry approved your application and it resulted in you receiving credit.  How is this done?  Step 1.  Click here and find out.