I have received thousands of questions and comments about credit scores in my 20+ years of working in the credit scoring business—and I realize there are a lot of misconceptions about credit scores and lending practices. Here are several common credit score myths that I see repeatedly surface.
Myth #1: Every inquiry for credit costs 5 points.
Photo by svenwerk — Slide 1 of 8
Fact:
There is no fixed set number of points that an inquiry will cost. Generally speaking, inquires have a relatively minor contribution to the overall score.
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Tom Quinn Tom is Vice President of Scores at FICO (Fair Isaac), and has more than 25 years of experience in the credit industry with previous positions at FICO, Nomis Solutions, MDS (now known as Experian) and Citibank.
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if this is true then why is it every time i apply for credit my score drops?
Any credit application you make triggers an “investigation” which a financial institution makes about your credit history in order to establish your credit worthiness. This investigation is considered as “hard inquiry” on your credit profile. It takes about three months before these inquiries drop off from your credit report. Excessive hard inquiries can have adverse effect on your credit score: It may be a signal to a potential lender that you are desperate and are attempting to take on too much financial obligation than you can manage. On the other hand, the unexpected promotional offers you receive from banks and other financial institutions are considered “soft inquiries”. Soft enquiries do not impact your credit score as do hard inquiries. I believe you should wait for at least three months before attempting another credit application whenever you have been denied credit.
I thought the hard inquires stayed on for two years, cause my hard inquires have stayed on for 2 years. Where did you get the 3 months from? Did the 15th USC change that part of the regulation?
if you apply for a credit card but receive it then does it effect your
credit score adversely?