David Saks: September 2008

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Credit Inquiries : Good and Bad - Soft and Hard

                                                 inquiries

Credit inquiries can work for you or against you. They can help you or hinder you. They can give you financial life or they can suck the financial life right out of the deal. They can provide you with healthy offers or destroy your hopes for securing an important loan. Excessive inquires can result in credit denial as much as a bad credit history can. Excessive inquiries can have an overwhelming negative effect on your credit history.

When considering buying a new home, one should be careful with credit inquires. Lenders don't like lots of inquires on a credit report. Every time you apply for a new loan and start the non-stop inquiry process your credit score may be lowered and you may or may not be approved for your loan. We all know that anytime there are are negative items on a credit report those negative items will impact the credit report in a bad way.

As an example, if you apply for lots of credit cards in a short period of time each application will result in a credit inquiry which can result in a negative impact on your credit score.

There's a good side to this, however, when your shopping for a car loan or a mortgage because the credit reporting bureaus recognize that your shopping and comparing, looking for the best deal. The bureaus generally allow you a thirty day period to shop around and allow your credit report to be pulled by as many lenders as you need to find to the best deal out there.

I've heard it said that all of the inquiries process within the thirty day window, such as from the date of the first mortgage application, and the good news is that all of those inquiries will only count as one inquiry. These inquiries will show up on your credit history as inquiries so you'll have a comprehensive and detailed record of whose been reviewing yoiur credit file. This is generally considered the "soft" side of the inquiry process because these inquiries don't impact your credit score in an unhealthy manner.

On the other hand, inquiries for new credit cards over a short period of time might have a devastating effect on your credit score. This is the "hard" variety that will slam you.

Credit inquiries may impact of 10% of your credit score. The maximum number of inquiries that can reduce your score is 10. I've heard it said that any inquiries in excees of 10 within a 6 month period will have no further impact on one's credit score. Chime in lenders !

I believe that credit inquiries will stay on your credit report for 12 months and, as they are removed from your credit history, your credit score will go up a point or two each time one is removed. Lots of credit inquiries for revolving accounts and other types of credit cards can cause a big negative effect on your credit score.


Credit inquiries can and will negatively impact your credit score when a bunch of them take place in a short period of time. Remember, if you apply for a lot of credit within a 90 day time period you'll have a credit inquiry from each company that you applied for credit with and this can ruin your credit score.

Watch out ! Protect your credit history !

Would you rather have an "A" in philosophy or an "A" on your credit history? I'd take the credit history because philosophy won't put a roof over your head, just allow you to consider the origin of the stars above it. But stay in school anyway.




David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • September 01 2008 05:15AM
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