If you get your credit checked by companies often does it reflect poorly on your credit report ?
I heard that if lenders pull up your credit report to see if they want to give you a loan or to find out how much it would cost to finance something to you, it makes a hit on your credit report. And a lot of these ‘hits’ can make you an unattractive candidate if you didn’t receive a loan from the lender who pulled your report. Is that true?
When you apply for credit, the credit check is a hard pull. Hard pull inquiries ding your score and too many can take a big bite out of your score. Too many credit applications looks like you are over extending yourself and looks bad.
However, soft pulls which are checks by existing creditors, checking your own credit, and screening for pre-approved credit offers, do not affect your score.
There is a section on your credit report that states how many recent inquiries there have been on our credit. Yes that is taken into consideration. When that happens, banks don’t know if you have been approved for the loans or not if it doesn’t show on your report yet. If there are a LOT, then it looks like you may be out there trying to get credit anywhere and any way you can. It’s best to only have your credit pulled when Absolutely necessary.
Yes it does reflect negatively on your credit, I’ve heard for every time you try to open an account / have a company run a credit check on you, it can take 5 points or so off your credit score…I’d be careful and only have someone check it if its absolutely necessary – good luck!
(If you were to check your own credit, you know to see what’s on your report, then that’s a ‘soft’ hit and won’t count against you. its a good practice to know what your report looks like)
I don’t think it affects your actual credit score, but if a lender sees a bunch of “hits” (credit inquiries) on your credit report, and then doesn’t see a loan that follows, it will reflect negatively on their overall opinion of your credit rating. To the lender, it looks like all those other credit institutions didn’t want to finance you, even if it was just because you chose not to accept a loan. The lenders will assume there’s no resulting loan because the creditors didn’t want to finance you, and they will take that into consideration.
Check out this website for a more detailed explanation:
http://www.myfico.com/CreditEducation/CreditInquiries.aspx
Inquiries placed on your credit report when you apply for new credit can impact your credit score. However, inquiries have a relatively small impact on your credit score. In a credit scoring model, there are stronger indicators of future payment performance, such as past payment history and use of credit. Inquiries are rarely, if ever, the only reason for poor credit scores. They only become significant if there are other issues already lowering your score, such as late payments or very high debt.
I’ve had good info about it here:
http://credit-report-score.10001mb.com
Best regards.