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how long do inquiries affect your credit score

What is a credit inquiry?

Basically, when you apply for a loan or a credit line, you give the potential lender the right to ask about your credit status and request a copy of your credit report from the credit reporting bureaus. As a result, you will see certain inquiries listed when you look at your credit report later. You may be surprised to see that some of these inquiries were made by enterprises, which you have never heard of. The only ones that matter are the ones made after you applied for some form of credit. The question is, do these inquiries affect your credit score? There is no one universally valid answer. If you apply for several different credit lines or loans in a brief period of time, the subsequent credit risk increases. Your score could be diminished as a result of the inquiries. To what extent is the score affected? This depends on the individual based on his or her unique credit history. On a whole, these inquiries do not have a major impact on the score. In the vast majority of cases, one extra inquiry will result in one’s losing less than five points.

The score will be affected to a greater extent if you only have a brief credit history or a small number of accounts. This also translates as a greater risk, as does a higher amount of inquiries. Statistics show that borrowers with over six inquiries on their reports are as much as eight times more likely to declare insolvency

than clients without inquiries. Notwithstanding all these facts, factors like your overall debt level and how timely you pay your bills are more important in terms of your comprehensive credit score.

What is more, not all credit inquiries have equal bearing. If you were looking for the best rate on a mortgage, student loan or car loan and found one in less than 30 days, the inquiries made in this period will not affect your score. This is a kind of bonus for not taking your time to find the best rate. The only inquiries on your report that are taken into consideration are those older than 30 days. Keep in mind that if you want to sustain a good credit score, you must keep low balances on credit cards and other forms of credit you have. You should not open new accounts unless you really, really need them. On the other hand, being responsible about new accounts is a great way to keep up a good score. Make sure you pay them on time. Late payments are likely to incur penalties, and your credit score will be affected. If your credit history is troubled, make efforts to reestablish it.
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Category: Credit

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