Some helpful tips about credit checks and inquiries!
Shawn Von Talge | Vice President, Flat Branch Home Loans
So, what’s an inquiry? → After applying for credit, you give permission to lenders to “inquire” about your credit report. You can see a list of who has inquired about your credit within your credit report. It’s important to remember that the only inquiries that count towards your FICO scores are the ones that come from applying for new credit.
How and what affects your FICO score?
- “FICO’s research shows that opening several credit accounts in a short period of time represents greater credit risk.” -Fair Isaac Corporation
- In regards to inquiries, here is an idea of how much one inquiry can affect your credit score: Typically less than 5 points will be taken off your score for 1 inquiry. -Fair Isaac Corporation
- Remember: Inquiries aren’t the only factors that can alter your credit score. How soon you pay your bills and the amount of debt you accrue are some of the most important factors that impact your credit score.
Rate-shopping and what it means for you in the hunt for your home loan!
When looking for a student, auto or home loan, many lenders may request for your credit report. Don’t worry! FICO scores ignore these inquiries made within the 30 days prior to receiving the loan. So if you find a loan within 30 days of shopping, the inquiries won’t affect your score within the time period.
Improving your score!
- Pay your bills in a timely matter.
- Avoid making multiple big purchases on your credit card.
- Only apply for and open credit accounts when it is necessary.
- Stay up-to-date with your credit accounts so that your account and credit reads correctly.
For more in-depth information about credit inquiries and your FICO score, visit www.myfico.com.