Friday’s Credit Tip #9: Be Careful of Inquiries on Your Credit Report
Every time that someone looks at your credit report, the inquiry is noted. If you have lots of inquiries on your report, it may appear that you are shopping for several loans at once or that lenders have rejected you. Both make you appear to be a poor credit risk and may affect your credit score. This means that you should be careful about who looks at your credit report. If you are shopping for a loan, shop around within a short period of time, since inquiries made within a few days of each other will generally be lumped together and counted as one inquiry.
You can also cut down on the number of inquiries on your account by approaching lenders you have already researched and may be interested in doing business with—by researching first and approaching second, you will likely have only a few lenders accessing your credit report at the same time, which can help save your credit score.
Online Loan Rate Comparisons
Online loan rate quotes are easy to get. All you have to do is type in some personal information, and you can get a quote on your car loan, personal loan, student loan, or mortgage in seconds. This is free and convenient, leading many people to compare several companies at once in order to make sure that they get the best deal possible.
The problem is that since online quotes are a fairly recent phenomenon, credit bureaus count each such quote estimate as an “inquiry.” This means that if you compare too many companies online by asking for quotes, your credit score may fall due to too many “inquiries.”
This does not mean that you shouldn’t seek online quotes for loans, not at all. In fact, online loan quotes are a great resource that can help you get the very best rates on your next loan. What this information does mean, however, is that you should research companies and narrow the list of possible lenders down to just a few before requesting a loan quote. This will help ensure that the number of inquires on your credit report is small and your credit rating will stay in good shape.
What about You?
Have you ever had a problem with credit inquiries before?