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The Effects Of Multiple Credit Inquiries On Your Scores

By: Gus Skarlis

Article Word Count: 328 words  [Comments (0)]
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Credit inquiries impact credit scores negatively because statistical studies show that multiple inquiries are associated with high risk of default.



Distressed borrowers often contact many lenders hoping to find one who will approve them. On the other hand, multiple inquiries can also result from applicants shopping for the best deal.



To avoid penalizing loan “shoppers,” credit ratings ignore inquiries that occur within 30 days of a score date.



Suppose, for example, I shop a lender on June 30 and the lender has my credit scored that day.



Even if I had shopped 50 other lenders in June and they had all checked my credit, none of those inquiries would affect my credit score on June 30.



Inquiries from May and back 11 months would, however, be counted on June 30.



To avoid biasing the credit score from earlier shopping episodes, the scorers treat all inquiries that occur within any 14-day period as a single inquiry.



If you shopped 50 lenders during June 1-14, they would count as one inquiry. If you spread them over June 1-28, they would count as two inquiries.



You will damage your credit if you spread your loan shopping over many months.



But, because the market can change from day to day, it makes little sense to do this in any case.



Circumstances can cause a consumer to shop, drop out of the market, and return later when conditions are more favorable.



You minimize the adverse effect by concentrating each shopping episode within 14 days or less.


Article Source: http://www.articledashboard.com





Gus Skarlis is one of the top loan officers in the country due to his extensive knowledge of loan placement and credit issues. His methods include educating his clients and keeping them up to date on the entire loan process. To contact him directly call 702-491-7251 or visit his website at: www.GusSkarlis.com





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