Credit Bureau inquiries are a common part in a person as inquiries happens when customers apply for new credits. Inquiries are basically where you authorize the lenders of the loans to approach the credit bureau for a copy of your credit report. The details of the inquiries will be listed in the credit report and the scores which count towards your FICO score would be the one that you applied.
According to FICO opening several accounts within a short period of time can prove to be credit risky and this can easily affect your credit score and this can hinder you in applying for new loans. The impacts of inquiries are entirely subjective to individuals as every individual will have different credit histories. Generally inquiries have a minimum effect on a person’s FICO score and it can be said a credit inquiry might record a loss of at most 5 points. The impact increases if a person has a comparatively few accounts and a short credit history. The most important aspect in maintaining a favorable score is the timely payment of all the bills and debts which ultimately will be reflected in your credit score.
All the credit inquiries are not treated in the same way as according to the research it shows that FICO score can be more predicted when the treatment involves rate-shopping like mortgage or student loans etc. FICO score generally ignores inquiries made 30 days prior to getting a loan. Student loans or Mortgage can be tricky as many lenders will request your credit report even though you are aiming at one loan. This is compensated by FICO by not taking into account the requests made within 30 days prior to the scoring of the loan.
FICO score can be improved by keeping in my mind the following things:
- The rate shopping period should be given due importance as this can have a significant cumulative effect if not addressed fast. A definite period should be kept like 30 days.
- Try your best to pay your bills on time and to settle your debts on time according to Credit Company.
- Keeping your balances in the credit card low can have a favorable effect on your credit score.
- The last measure is to open accounts only if it is necessary this can help you planning more for future.
To conclude Inquiries play a huge role in effecting your score and importance should be given to maintain it in good range as many of the credit companies provide loan based on this score.