How Inquiries Affect Your Credit Report
Did you know that inquiries on your credit report can actually affect
your credit score? Having too many inquiries can lower your credit score so that
it makes it difficult in the future to get the lending that you need.
Understanding the way that inquiries affect your credit will help you
protect your credit score in the future.
Any time that you apply
for credit, such as a car loan, credit card, or even a mortgage your credit report
is pulled and looked into, which is known as an inquiry. It is noted
on your account how many different people have inquired as to what your credit
status is. These credit inquiries actually will stay on your credit report
for one year, and they have the potential to affect your credit for that entire
duration.
You should understand that there are two different types
of credit report inquiries. The hard inquiry is the type that will affect
your credit report more, and this is the type of inquiry that occurs when you
authorize your lender to view your report when you are applying for any credit.
You should be very careful about what lenders you allow to hard pull your
credit.
In addition to the hard pull, there is also the soft pull.
The soft pull is not a big deal because this does not negatively impact
your credit score. A soft pull is done when someone is pre-approving you
for a loan or financing of some sort.
When you know how credit pulls
can affect your credit score you may be worried when you are shopping around
for financing. What you should know is that any credit inquiries that occur within
14 days are counted as one. You want to be careful about how often you
allow your credit report to be pulled because many lenders will not lend to
those that have too many inquiries because this generally means that you have bad
credit, you are over extended, and therefore too large of a risk.
If
you pull your credit report and you see that there were inquiries made by unauthorized
individuals you can dispute it. You can do this by contacting
the creditor directly in writing and ask them for proof that you wanted them to
check your credit for any reason. If they cannot provide the proof they
are required by law to remove the inquiry from your credit report.
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