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Do You Know The Difference Between A Hard Inquiry or Soft Inquiry On Your Credit Report
By Liz Roberts
By know, you know that too many inquiries can hurt your credit score.
If you are trying to get a credit card with a really good rate, you may
have been shopping around for a while so that you can get the best
possible deal. Chances are, you may have found a few different cards that
you like, but there were a couple of things that you did not like about
each one. Sometimes, you will find one that you like but you have to
pay an annual fee. Other times, you will find one with no annual fee but
there will be really high late charges or other miscellaneous fees.
However, you should not be applying for all of these cards. Looking
through all of the terms for each one of them is one thing, but applying
for all of them is another. Were you aware that making a number of
inquiries could actually hurt your credit score? Well, it can and could
actually end up doing quite a bit more damage than you would think.
The truth of the matter is, every single time that you apply for a
credit card or inquire about any type of a loan or store credit, the
information will show up on your credit report. This is called a "hard
inquiry". A hard inquiry can actually drop your credit score by several
points. Many times, people will apply for different kinds of credit while
they are completely unaware that the inquiries are going against their
credit score. It is actually too bad that this information is not given
to these individuals up front so that better choices may be made.
Another common misunderstanding is that requesting a copy of your
credit report can actually hurt you. However, this type of an inquiry is
called a "soft inquiry" and should never count against your credit
score. If this kind of error ever shows up on your credit report and it is
showing against you, it is very important that you go through the steps
to resolve the error immediately.
Mortgage Inquiries
The credit reporting agencies have made one exception knowing that
today there are so many mortgage companies you can go to for a home
loan. They have made it that multiple mortgage inquiries made within 14
days are treated as one inquiry. You should try to do all your "rate
shopping" within a 30 day period. These inquires are generally not counted
against your score.
Many creditors will look to see the exact amounts of credit inquiries
that you do have on your credit report. Depending on the guidelines of
each creditor, four or more inquiries within a certain time frame of six
to nine months can be considered to be quite an excessive amount. If
they do deem this amount of credit inquiries as excessive, they could end
up denying your credit request. This request and denial will then show
up on your credit report along with any others that you may have. All
of these inquiries will hurt your credit score. So choose what you apply
for carefully and really think about whether or not this new credit
card or loan is worth dropping your credit score by a few points.
About the Author
Liz Roberts is a loan consultant with NewHorizon Finance and has been
providing consumers and business owners with financing since 1989. Not
sure which credit card is right for you? Click here for credit card reviews. Bad Credit? Join our mailing list for tips on building and repairing your credit .
Copyright 2006
Article Source: http://www.simplysearch4it.com/article/36025.html
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| Some other articles by Liz Roberts | |
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