Ways Credit Inquiries Affect Your Credit History
Anyone that wants to offer you a line of credit or a loan will check your credit history before following through on the deal. All of these pre-qualified offers you get in the mail stem from someone running a credit check. Each one of these checks or inquiries can have an impact on your credit history, and ultimately on your credit score and your ability to borrow money or get a low interest rate as well.
Credit checks and inquires are done in two different ways, and only one of them actually affects your credit history. When you apply for mortgages, loans, or lines of credit and a credit check or inquiry is run because of your having applied, it will appear on your credit history.
Your credit score will get lower each time you apply for credit. Since credit inquiries can affect your credit score negatively, you should try to keep the number of credit applications you fill out to a minimum.
That does not mean that you shouldn't shop around for the best loan opportunity. Similar credit inquiries (like for a mortgage or auto loan) that are pulled within a particular time frame, around 30 days, will be counted as just one inquiry. Companies finally realized that shopping around was a good thing and they quit penalizing the smart consumer because of it.
Credit inquiries and checks are also run on you by companies that have a permissible purpose as defined by the Federal Fair Credit Reporting Act. That means that, even though you are not aware of it, certain businesses have the legal right to check your credit.
Companies that have the legal authorization to run a credit check on you include retail stores and credit card companies. They want you to open credit lines with them, so they do credit inquiries in order to offer you preapproved cards. Even though these credit checks do not affect your credit history, they do appear so that you can find out who has been inquiring about your credit.
Another credit check that does not do any damage to your credit history is a check done by a prospective employer before they choose to hire you.
All credit checks done by businesses are reported so that you can be aware of them. Only the credit checks that you authorize by applying for credit lines and loans are able to damage your credit history.
Credit checks and inquires are done in two different ways, and only one of them actually affects your credit history. When you apply for mortgages, loans, or lines of credit and a credit check or inquiry is run because of your having applied, it will appear on your credit history.
Your credit score will get lower each time you apply for credit. Since credit inquiries can affect your credit score negatively, you should try to keep the number of credit applications you fill out to a minimum.
That does not mean that you shouldn't shop around for the best loan opportunity. Similar credit inquiries (like for a mortgage or auto loan) that are pulled within a particular time frame, around 30 days, will be counted as just one inquiry. Companies finally realized that shopping around was a good thing and they quit penalizing the smart consumer because of it.
Credit inquiries and checks are also run on you by companies that have a permissible purpose as defined by the Federal Fair Credit Reporting Act. That means that, even though you are not aware of it, certain businesses have the legal right to check your credit.
Companies that have the legal authorization to run a credit check on you include retail stores and credit card companies. They want you to open credit lines with them, so they do credit inquiries in order to offer you preapproved cards. Even though these credit checks do not affect your credit history, they do appear so that you can find out who has been inquiring about your credit.
Another credit check that does not do any damage to your credit history is a check done by a prospective employer before they choose to hire you.
All credit checks done by businesses are reported so that you can be aware of them. Only the credit checks that you authorize by applying for credit lines and loans are able to damage your credit history.
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posted by Debt Consolidation Loan at
10:05 AM
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