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Inquiries and establishing credit

January 17th 2013

"I am on my way to establish credit so how many inquiries should I make? I have also heard that too many inquiries can lower down my score. Is it correct?" - This is a common question that most of the people trying to build up credit face. This post is an attempt to help them.

Inquiries negatively affect your score but the extent to which it affects actually depends on the overall profile of the credit report that's being scored. For instance, an inquiry is going to matter more on somebody who has a short credit history without a lot of accounts.

Consider a college student who has only a student loan included in his credit report. Now, if he gets a few inquiries, then that's going to affect his score more negatively than someone else who has got a long credit history.

The worst thing to do while establishing credit is getting a secured account and then putting across your credit applications to all of the big banks and the national department stores. By doing so, you start generating hard inquiries that in turn lower down your score. As lenders consider too many hard credit checks as an indication that you’re facing some kind of financial hardship and are desperately looking for credit to help you out

[tags] credit report,credit inquiry,hard pull,credit score,establish credit[/tags]

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