Three Types of Credit Inquiries – Learn Which Can Lower Your Credit Score
Myth: Checking your score online reduces your credit score.
This myth is false. When you check your credit history from a credit monitoring service, it is not treated as a credit inquiry in the traditional sense. This simply is a consumer inquiry. These types of inquiries are not listed on your credit report. If they were it would discourage a lot of people from periodically reviewing their credit report.
It is recommended that you check your credit history at least two times a year with a credit report company. You want to do this especially if you are interested in buying a home. This helps to remove inaccuracies and detect credit fraud earlier. It can take up to three months or more to eliminate a discrepancy.
There are different Types of Credit Inquiries
The kind of inquiries that can lower a person’s credit score are inquiries made by a third party with permission from the consumer. This is not to be confused with a look see. An example of a looksee would be Citibank taking automated looks at credit scores from individuals. Citibank will do this in order to collect leads for a direct mail campaign for preapproved credit card offers. There would only be a credit inquiry if the recipient of the offer sent back the credit application permitting Citibank to review their credit in more detail.
Advice to Protect Your Credit Score
Too many permissions granted inquiries from outside companies will lower your credit score. For example, if you decide in one month that you will apply for a Sears card, a gas card from Shell, a preapproved American Express offer you got in the mail. Then a Visa card at the ballpark because they gave you a beach towel with your team’s logo on it, then your score is in danger of lowering. These credit application choices to you may seem like just everyday life decisions, but to the credit industry, you may be deemed as a possible credit risk. Having too many inquiries can be perceived as this person needs money fast and might not be financially stable. A month later you might decide to buy a car; you may pay a higher interest because your credit score lowered. Credit inquiries remain on a credit report for a year. Usually, after six months of no inquiries, a credit score will return to its former self.
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