Will Applying For New credit Hurt My Credit Score?

05-Jun-2014

This is a common misconception. There are several factors that must be considered when applying for new credit.

1) If you apply for several credit cards at once, each occurrence will result in an "inquiry" on your credit report. Each inquiry drops your score about 7 points. So it would be prudent to carefully review the offers you receive and select one or two to apply for.

The inquiry shows up on your report regardless of whether or not you are granted credit. But the bigger issue is that all of your creditors see the inquiries, and this indicates to them that their involvement with you may be at a higher risk. Because you are seeking additional credit lines, you may be expecting to spend more money on credit. This can put their balance with you at risk of default. Therefore, there may be negative consequences to frivolously applying for multiple cards within a short time span.

2) If you are trying to purchase a car, and go from dealership to dealership filling out applications at each one within a short time span, each application will result in an inquiry on your credit report. This is usually viewed by your creditors as only one inquiry for the purposes of risk assessment. The same holds true for real estate. However, you may need to apply to the credit bureaus to remove those extraneous inquiries could take some time. You may need your Credit Concierge's help to make this happen.

Let us know how we can help you.

Rondi Lambeth, FICO Certified Credit Pro


 

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