How Will Multiple Credit Inquiries Affect My Credit?
Have you ever wondered how multiple credit inquiries for an auto loan may affect your credit score? This video, created by Auto Consumer Info, will help you answer some of those questions.
1. How much will credit inquiries affect my score? The impact from applying for credit will vary from person to person based on their unique credit histories. In general, credit inquiries have a small impact on one's FICO Scores. For most people, a credit inquiry will take between one and five points off their FICO Scores. For perspective, the full range for FICO Scores is 300-850.
2. Does FICO treat all credit inquiries the same? All credit inquiries are not treated the same. Research has indicated that FICO Scores are more predictive when they treat loans that commonly involve rate-shopping, such as mortgage, auto and student loans, differently. For these types of loans, FICO Scores ignore inquiries made in the 30 days prior to scoring, since many customers shop multiple lenders to obtain the most attractive terms.
3. What about multiple inquiries by multiple lenders? Looking for the best terms on an auto loan may result in multiple lenders requesting your credit report, even though you are only looking for one loan. To compensate for this, FICO Scores ignore mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, even if you shop several lenders within 30 days, those additional inquiries won't affect your scores while you're shopping. FICO also looks on your credit report for auto loan inquiries older than 30 days. If FICO finds some, your scores will consider inquiries that fall in a typical shopping period, as just one inquiry. You can visit http://www.myfico.com/ to learn more about credit scores.