Clearing the Confusion about Inquiries and Your Credit Score

If you’ve ever applied for a mortgage loan, and if your loan officer was on the ball, you were told not to go shopping for a car or furniture for that new house. You were told that looking is fine, but do not give a sales person your Social Security number for any reason.

You were warned that inquiries on your credit report would lower your score, and could even prevent you from getting your mortgage loan.

This is true – and borrowers who are barely squeaking by with a credit score at the lower levels of acceptable can cause themselves to lose out on the mortgage.

At the same time, you should have been told not to withdraw funds from your checking or savings accounts to make a large purchase in cash, because your mortgage lender will check your balances to make sure that you have the required balance in the bank to pay your down payment and have a few months’ payments left over.

These warnings have led many to believe that any and all inquiries will lower your credit score, and that is not true. “Soft” inquiries will not harm you, because they don’t indicate that you’re trying to obtain credit.

These would be inquiries you make yourself, inquiries from potential employers, and inquiries from companies who routinely check credit as a preliminary step before sending out letters soliciting your business. Likewise, an inquiry from a creditor with whom you’re already doing business will not affect you.

These may or may not show up on your report, but don’t worry about them.

Checking your own score periodically is a very good idea – in fact, Fair Isaac, the inventor of the FICO score, recommends that you do so. Checking will allow you to catch errors early on, and will alert you to signs of identity theft – one of which is inquiries from creditors you don’t recognize in cities where you don’t live.

If you live in the Midwest and you see an inquiry from a car dealer in Seattle, it’s time to find out why. “You” may now live in Seattle and not even know it.

When you see such an inquiry, or see something strange – such as an incorrect address for you or your spouse – don’t dismiss it as a mistake. Contact the credit bureau immediately and find out more. Let them know that you may be a victim of identity theft and need the information.

Why not get a copy of your credit report today – right here at

One Response to “Clearing the Confusion about Inquiries and Your Credit Score”

  1. home loan financing says:

    There are many type of loans available in the market. Its very important to examine all your options first before settling with your final choice. Thanks for the info!

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