We received an email from Angie today asking about how to rebuild her credit after a bankruptcy filing. In her question, she mentioned a common credit rumor:
I do not have any credit cards and I am afraid to apply for one because I think I will be turned down due to my bankruptcy. I was told that being turned down for credit lowers your credit score so I won’t apply.
This is a fairly prevalent credit myth. The truth: being turned down for credit does not impact your credit score at all. In fact, application approval and rejection information it isn’t even reported to the credit bureaus – Equifax, Experian and TransUnion.
When you apply for a new account, an inquiry record will appear on the credit report that was used in the review. An inquiry is simply an item on your credit report that shows that someone with a "permissible purpose" under FCRA regulations
requested a copy of your credit report. (Click here for a sample of an inquiry records on an Equifax credit report.)
Inquiries can cause a small ding in your credit score, but this occurs whether or not you are accepted for the account. If you apply for new accounts excessively, you may see a more noticeable decrease in your credit scores.
Do you have a credit question? Have you heard a good credit rumor lately? Share your feedback and questions in the comments section below.