Your Credit Score Can Be Destroyed By Simple Credit Inquiries
Below is a MRR and PLR article in category Finance -> subcategory Credit.
How Simple Credit Inquiries Can Impact Your Credit Score
Discover the surprising impact of credit inquiries on your score and learn how to protect it effectively.
Understanding Credit Inquiries
Credit inquiries, whether you're shopping for a phone, car, home loan, or insurance, can reduce your credit score. Even a small drop in points can lead to thousands of dollars in additional interest over time, potentially affecting your ability to qualify for loans.
Types of Credit Inquiries
1. Shopping Inquiries: When you shop around for a specific purchase, like a car, inquiries made within a two-week period are considered as one by credit bureaus. This typically results in a minor decrease of fewer than five points.
2. Diverse Inquiries: If you apply for unrelated credit, such as a car loan and a cell phone plan, each inquiry counts separately, potentially lowering your score significantly.
3. Marketing Inquiries: Companies sometimes buy lists to send pre-approved offers. These don't impact your credit score, but they can be a risk for identity theft. Always shred unsolicited offers.
Monitoring Your Own Credit
Checking your own credit report doesn't affect your score. You have the right to know what's in your file. However, scores may vary as different bureaus interpret your data differently. Consult a financial expert when considering major purchases.
Protecting Your Credit Score
To safeguard your score, get loan approval before shopping. Even a five-point drop can lead to higher interest rates or loan denial. Credit inquiries stay on your report for up to two years, so you might need to request their removal.
Contact Information for Credit Bureaus
- TransUnion: 1-866-887-2673
- Equifax: 1-800-685-1111
- Experian: 1-888-397-3742
Prevent Identity Theft
Frequent credit report reviews can help detect fraud. If you see unknown creditor names, this might indicate identity theft. Contact all three credit bureaus to place a fraud alert on your report to prevent further unauthorized use.
By understanding how credit inquiries work and taking proactive steps, you can maintain and protect your credit score effectively.
You can find the original non-AI version of this article here: Your Credit Score Can Be Destroyed By Simple Credit Inquiries.
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