Inquiries can be a problem for your credit score. There are some miss understandings of how this is the case. The consumer needs to understand these points to best manage their credit score. This is like money in the bank. The difference between a 698 to 701 credit score has the potential on a $200,000, 30-year fixed mortgage to cost nearly $2,600 over a ten-year period. For a Mortgage / Credit Score Analysis Click Here
Scenario to give a better understanding of best management of your credit inquiries:
First off we consider going car shopping without a pre- approved auto loan from your financial institution of choice is a bad idea. You will be in a much stronger negotiating position if you have pre-approved financing, and this will limit the number of inquiries for the transaction. Never divulge the total amount available to you. Don’t sign any contract until you take the vehicle for inspection by your mechanic.
If you don’t have pre-approved financing– Once you have selected your vehicle you are ushered into the finance department to negotiate the deal then apply for financing, and on the bottom of your application you should write the words “ONLY TWO INQUIRIES.” Although this is not really necessary in most cases, but will put the finance manager on notice not to mess with your credit!
Finance managers will shop your credit to get the best deal for them. Inquiries pulled the same day are counted as one. However, if for some reason the parties are not happy with the results, and the application is sent off to other potential lenders on days following they will count as additional inquiries.
How Inquires Affect Your Score:
Up to three inquires in a two year period will not affect your credit score. Depending on the bureau the number of points off your score varies when there are more than three inquiries in a two year period. I’m not certain of which bureau is which, and it really doesn’t matter, but the amount is from 3-5 points from your credit score. Given the discussion in paragraph one you can see why the management of your credit inquiries is important to you.
Best Wishes for a Happy, Healthy, & Prosperous New Year!!!