Repair credit fast requires you to understand the impact of INQUIRIES on your credit scores and what you MUST do to “fix” inquiry mistakes.
Holy mackeral! I cannot believe just how many people still do not understand the damage caused to credit scores by those seemingly innocent inquiries!
Let me be 100% clear: Every time you give somebody written permission to pull your credit, you are being PENALIZED!
How much of a penalty is what you also need to know. There is no hard and fast rule for the hit your scores take with inquiries. The hit varies from user to user and the type of inquiry.
From our experience, I safely can report (on the low side) the hit to your credit scores is 12-36 points for every 3-5 inquiries. You’re shocked, aren’t you?
You thought nothing of filling out all those credit applications just to get 10% off your first purchase at Sears or up to $250 off your first purchase with your new Home Depot card.
It seemed so harmless. Oh wait, it gets so much better (or worse depending on how you’re taking in this information).
Just wait until you hear the most sneaky part of all…and how this sneaky little “trick” kills your credit scores even more….click “read more.”
THE DANGEROUS TRUTH ABOUT INQUIRIES
Of course, the BIG 3 will refute this penalty, claiming there’s no penalty if you’re shopping for financing within a certain period of time.
Again, let me be 100% clear: this is 100% bullsh*t! I personally have seen many credit reports with clear (and serious) hits resulting from inquiries.
Shopping or not, the hit is real and hard on your scores! In case you are not fully up-to-speed with what inquiries are or the types of inquiries, here’s the scoop:
- A hard inquiry occurs when you apply for credit or open an account. By law, this type of inquiry cannot stay on your credit report for more than two years but only is used in calculating your credit score in the first year. Banks sometimes initiate a hard inquiry when you open a bank account, but a potential creditor will always do a hard inquiry when you apply for a credit card or a loan.
- A soft inquiry occurs when an existing creditor checks your credit report, or when lenders review your credit report on their own initiative to decide if they want to extend any additional credit offers to you…or to see if anything negative has changed with your credit.
These soft inquiries (including any time you pull your own credit reports) do NOT affect your scores and do not show up on the reports potential lenders see.
If you want to find out who’s been checking out your credit, the best thing to do is to monitor your credit reports.
Now, here’s something you don’t know but NEED to know. Are you familiar with all the commercials on TV (well, not so many now with housing in the toilet) telling you to let mortgage lenders compete for your business?
They were all over the TV…and in the newspapers…on the radio.
Guess what? When you give just one of these “mortgage lenders” who’s really a lead-generation company permission to pull (your) credit, you now have given MANY mortgage lenders permission to pull your credit!
Each lender pulls your credit, hitting you for a hard inquiry. Any question now about the number of people who qualified BEFORE all this cedit pulling for a certain mortgage but didn’t qualify after all this credit pulling?
Yep, in my own real estate business, I have witnessed this.
The same damage occurs with car dealers. Do NOT sign any form giving a car dealer’s finance manager permission to “shop” for a better rate. The shopping may cost you the car and/or the previously quoted rate when all those inquiries cause your scores to drop into a higher risk range…and a higher monthly payment or a rejection.
IMPORTANT: For a mortgage, find the one mortgage professional (mortgage broker or loan officer, for instance) you trust and let him or her shop for you with just one credit pull. Another option is to pull your credit reports and let various mortgage professionals quote you off your reports, with no permission to pull.
For a car loan, get your financing BEFORE you ever step foot onto a car lot. Do not give the finance manager carte blanche permission to “shop.”
Repair credit fast ‘secrets’ help you avoid the pitfalls of even more damage to your credit scores. Avoid the shopping.
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