Credit Myth No. 4: Will multiple credit inquiries hurt your score?
by Greg Vogel
Myth No. 4: Multiple auto/mortgage loan inquiries in a short time span will hurt your credit score.
This myth can be true in some situations, but the scoring model has a built in safety mechanism for people who shop loans within a relatively short period of time.
Many people shop multiple lenders for the best products and rates when they’re looking to buy a car or a home. When this happens, the lenders inevitably pull their credit so they can see what the rates/products will be for that person’s credit score. This causes a “hard inquiry,” and credit scores can be negatively impacted by each inquiry.
If a consumer is shopping around a bit, they may end up with a handful of credit inquiries. However, the FICO model understands the reasoning for this and has a safeguard in place to help with this exact scenario.
As long as a consumer does all their shopping within a 30- to 45-day window, the scoring model will only count all of those like inquiries as one. So, if you’re getting a new car and you have 10 different auto lenders pull your credit within a 20-day period, the scoring model will only count that as one inquiry instead of 10 different inquiries. So, you’re covered!
Now, if you decide to go to one auto lender every month, that will have serious negative consequences for you because most likely they’ll all be counted as individual inquiries.
Greg Vogel is a Consumer Credit and Debt Advocate. He is a FICO and credit reporting expert with the goal of putting himself out of a job through creating awareness and education about the exploitative nature of the Credit and Debt industry.Wellness Credit advocates for consumers in the credit world and repairs credit to raise FICO scores.
Val J Aranda, REALTOR® & Certified Home Marketing Specialist
“Coaching Texas Home Buyers and Sellers”
4007 McCullough Ave, Suite #477
San Antonio, TX 78212 | Call/Text Val: 210-378-5987