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Credit Inquiries -- They Matter! Main Boise Home Loans
Consumers are bombarded daily with offers of new credit. With 10% of your credit score at stake, taking advantage of these "special offers" does nothing good (or special) for your credit score.

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Dear BuildIdaho Reader:

Even with the economy in recession and credit lending and underwriting guidelines tightening, I'm still continually amazed at how often my customers are hit with new credit offers. It is practically impossible for a person to head to the mall or even your own post office mailbox without someone asking you to apply for a new credit account. Depending on your individual circumstances, simply responding to a new credit offer can cost you between 2-20 points from your credit score.

There are two types of credit inquiries...you need to know the difference between the two.
 
SOFT INQUIRY
 
Soft inquiries DO NOT have any affect on your credit score. These are some examples of soft inquiries:
 
Existing creditors reviewing your credit
Potential employers checking your credit before hiring you
Auto insurance applications
Landlords pulling your credit
You pulling your own credit
Promotional inquiries you receive in the mail as a solicitation to open new credit
 
HARD INQUIRY
 
Hard inquiries into your credit DO affect your credit score. Hard inquiries include the following:
 
Applying for a mortgage or home equity loan/line of credit
Applying for a car loan
Applying for a new credit card
Student loan applications
Applying for instant credit offers at the register while shopping
 
Why does this matter? You need to look at it from a creditor's perspective. Consumers who have been very actively shopping for credit in the last year may be living beyond their financial means. People who are desperate for financing or new credit or living beyond their means may be at a higher risk of default on their credit accounts.
 
In my next post, I'll discuss how to improve this part of your credit score, as well as why you ARE NOT penalized for shopping for a car loan or mortgage...as long as you do it correctly!
 

If you are interested in talking more about this post or a specific credit scoring issue you have or know about, feel free to call me at (208) 880-0316, or email me at eric@ericsloans.com. You can also visit my website at http://www.ericsloans.com.

Regards,


Eric Leigh, Mortgage Consultant
2965 E. Tarpon Drive, Ste. 150
Meridian, ID 83642
(208) 880-0316
http://www.ericsloans.com
eric@ericsloans.com
 
Posted by Eric Leigh at 8/12/2009 1:11:00 PM
Comments (1)
Re:Credit Inquiries -- They Matter!
Great post Eric.
Posted by on 8/13/2009 4:45 AM
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Michelle Penick, Build Idaho Client Real Estate Services

Michelle Penick

Idaho REALTOR ®
208.629.0217 | Info@BuildIdaho.com

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