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Will Credit Inquiries Lower My Credit Score?

By
Services for Real Estate Pros

The answer is yes and no.

 When you apply for credit, you are giving permission for your credit report to be pulled from a credit reporting agency, and this is called a "credit inquiry."  Many consumers that seek credit improvement are concerned that these inquiries will negatively affect their credit ratings score

 The truth is that the only inquiries that count towards your FICO score are those in which you are actually applying for credit. The impact on credit scores can vary, but usually it's to the tune of five points or less. Overall, for the credit bureaus, inquiries appear to play a minor role in terms of assessing individual risk. However, according to www.MYFICO.com, inquiries can have a greater impact if your credit history is short or if you have few accounts.

 It is important to note that not all credit inquiries are created equal.  For example, since opening multiple new lines of credit in a short-period of time is a red-flag in terms of "perceived risk" one could see a larger drop in credit score. 

 In the end, paying your bills in a timely manner and try to limiting inquiries you can control, like excessive credit card applications, play a far bigger role in determining your credit score.

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Vitesse Financial has an A+ rating with the Better Business Bureau. Not only do we specialize in fixing inaccurate errors on credit reports, we educate on what you can do to optimize your credit score.

Greg Tilley
President
Vitesse
Financial

1730 South College Avenue Suite 205
Fort Collins, CO. 80525

Direct: 970.407.9110
Toll-Free: 866.407.9110
Fax: 407.9172
creditrepair@vitessefinancial.com
www.vitessefinancial.com

Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

Well done not many in the industry know the correct answer.  I am not trying to premote anything but I did do a video on this and many in the industry have found it helpful you can view it at http://www.thecreditguy.tv/the-impact-of-an-inquiry-on-your-fico-score/

Feb 05, 2012 03:47 AM