Whether you're trying to obtain a small personal loan, an auto loan, or a home or business mortgage, your credit score plays a crucial role. New credit (or your pursuit thereof) is one of the main factors that determine your score. When your credit score is being calculated, then the most recent credit on your report will account for about 10 percent of your score. Within that "new credit" category, there may be what's called hard credit inquiries. That's why inquiry removal can greatly affect your credit score in a positive manner. Let's explore how this works.
Credit Inquiries Explained
A credit inquiry is displayed whenever a business (with permission according to the federal Fair Credit Reporting Act) requests a copy of someone's credit report. Some inquiries called "hard inquiries" will count against your credit score, while others called "soft inquiries" will not. Hard inquiries are those created when you actively apply for new personal credit, whether it is through a bank or credit union, credit card company, finance company, or even a retail outlet. These are inquiries that result when you need to borrow money for credit cards, mortgages, car loans, furniture purchases, high-end electronic purchases, boat loans, etc.
In inquiry removal and credit repair, the goal is usually to remove as many of the hard inquiries as possible so your credit score will gradually go higher. There are also involuntary credit inquiries, which are pursued by businesses with which you did not apply for credit. These will not count against your score. Inquiries made by companies with whom you already own a credit account do not count as well. Credit checks that are performed by a potential employer do not count against your score. Although these types of inquiries will not affect your FICO score, they will appear on your credit report.
How Credit Inquiries Affect Your Credit Score
New credit inquiries may or may not affect your FICO credit score. For some, one inquiry will not lower their score at all. For others, however, it may lower the score by a few points. Multiple inquiries can add up in a hurry when it comes to lowering your score, so be careful how often and with whom you apply for credit. Some companies will send your credit check through multiple finance companies to find the "best deal" or the best interest rate. This can harm your score tremendously because each individual finance company will show an inquiry into your credit report, especially if you shop around at various locations for an extended period of time.
Hint: When shopping for the best interest rate for an auto or home loan, try to decide on a loan company or bank within 30 days of your initial inquiry. Credit reporting agencies do allow for rate shopping and will ignore all mortgage and auto loan inquiries made in the 30 days prior to scoring.
Beware! There are also unauthorized inquiries, which are hard inquiries made by companies without your permission. These can lower your score as well, so it's a good idea to get help with inquiry removal in these cases.
Benefits of Inquiry Removal
Inquiry removal for credit repair can help boost your credit score tremendously. And even if it's only by a few points, these points can make or break your ability to obtain a loan. Inquiry removal may enable you to obtain better interest rates on a mortgage or auto loan. You might be able to obtain a line of credit for personal or business use. A better score arms you with the ability to obtain credit cards with higher limits. Removing 10 recent inquiries can boost your score by up to 50 points, so inquiry removal is well worth the effort!
If you're seeking ways to boost your credit score, check out online inquiry removal and credit repair professionals. A credit repair specialist can help you get back on track with your credit.
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Chris Robertson is a published author of Majon
International. All Rights Reserved. Copyright 2009 (Tue Dec 30 2008)
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