Credit Inquiry Troubles

Have you been applying for several different credit cards or small loans over the course of the last few months? Did you know that every time you apply for a credit card or a loan of any type the company you are applying with runs a credit check? Another temptation is all those credit card offers you receive in the mail or even in your email along with various other companies offering you their credit card such as Fingerhut. You may even receive a letter stating that you have already been approved for a certain amount of credit through the various companies, this is not true. However, if you fill out the form and send it back, the company will run a credit report. After they receive your credit report, they will either approve or deny you credit. The problem is that all these inquiries to your credit report actually lowers your credit score even if you were approved for credit.

Now, you learn more devastating news, you have a low credit score and cannot be approved for a home loan. The reason may be all these inquiries, however, the bank or lending company does not care why your credit score is low, they only know it is low and that is enough for them to deny your loan.

Inquiries to your credit can lower your FICO score by at least 5 points. Some companies can only see these inquires for around 6 months while lenders in most cases can see them for up to two years.

A lending company that sees all these inquiries over the last two years may see that you are desperate person trying to receive credit in any way that you can. Remember, the credit card companies and others cannot see all these inquiries but a lending company such as a bank can see these and it will not look good for your overall credit rating.

Another thing to consider, some times these companies that are offering you a credit card, may have already ran your credit report. They may already know your FICO score and know that you are a worthy candidate. These types of inquiries are not included until you fill out the application form or at least they do not count against your score. However, once you fill out the form, your credit score will go down.

If you are on the quest for a home loan or a car loan, you may find that you need to visit more than one lending company. If at all possible, try to apply to all within a 4-week period, as this will look better on your credit report than one per month.

When a lending company sees over 10 inquiries they often consider the person is searching for a large variety of credit types, which can increase their debt and places them on a high-risk list. If you are in search of a large loan for a home or vehicle it would be best to wait until you have received the loan prior to applying for other types of credit.