Do Credit Inquiries Hurt You?

At the end of each report will be a log of inquiries. An inquiry notation is made each time someone requests a copy of your credit file from that credit bureau. Any company that receives a copy of your credit profile will be listed under this inquiry section of your report.

[Excerpted from Fresh Start: The Authoritative Guide To Consumer Credit Repair.]

Lenders don't like to see a lot of inquiries on a credit report. Excessive inquiries can result in a credit denial as easily as bad credit. Thus, you will need to verify the type of inquires made and take steps to remove any unauthorized inquiries. Not all inquires are viewed negatively. In fact several types of inquires will not appear on any copy of your file except for the copy you
receive.

Types of Credit Inquiries and Their Effects On Your Credit Rating

There are six origins of inquiries:

• Your Existing Creditors (okay)

  Your existing creditors may do a periodic review of your account for many reasons. These inquiries are not viewed negatively.

• Yourself (okay)

  A notation may be made each time you request a copy of your own file. This notation does not appear on the copy that goes to your potential lender and does not count against you.

• The Bureau (okay)

  The bureau may compile mailing lists for its subscribers based on the criteria that the lender specifies. Your report may be reviewed as a candidate for a particular mailing list. Again, these internal inquiries do not appear on the copy that goes to your potential lenders and therefore do not reflect negatively.

• Potential Lenders (negative)

  Lenders do not have to have your permission to obtain a copy of your credit file. The law only requires that they reasonably expect to use the information in a credit transaction. Any member of the bureau can obtain your file. All they need is a social security number or a name and address. You should be cautious about giving out any such information until you're serious about doing business.

• IRS (negative)
• Anyone who has a judgment against you (negative)

  The most common inquiries are those by lenders with whom you have applied for credit. A banker will look at them in one of two ways. If they are recent, they are looked at as potential debt pending approval. Lenders have no way of knowing the status of these other pending applications and are likely to take the safest action by denying your application. If they are more than a couple of months old, it looks as if they turned you down. If there are several previous declines, the banker has to wonder why.

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