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How Credit Inquiries Can Impact Credit Repair

by | Apr 15, 2024 | News

When it comes to credit repair, the number of times your credit is checked can have an impact, but how much it affects you depends on different factors. Here’s a breakdown:

1. Hard Checks: These happen when a lender reviews your credit report during a credit application process, like when you’re applying for a loan or a new credit card. Hard inquiries can temporarily lower your credit score since they show that you’re looking for new credit opportunities. However, this drop is usually small and short lived, lasting for around 12 months. Having too many hard inquiries in a short span could make lenders wary and suggest financial difficulties, which might affect your chances of getting approved for new credit.

2. Soft Checks: These occur when you review your own credit report or when lenders check it for pre-approved offers. Soft inquiries don’t impact your credit score because they aren’t the result of you actively seeking new lines of credit. Therefore, keeping an eye on your own credit or letting lenders check it for pre-approval won’t have any negative effects on your score.

In the context of credit repair:

1. Limit Unnecessary Credit Applications: If you’re focused on improving your credit situation, it’s best to steer clear of applying for unnecessary lines of credit. Each time a lender checks your credit, it may cause a slight dip in your credit score. Therefore, it’s advisable to apply for credit only when absolutely necessary and when you are confident that you meet the required criteria.

2. Consider Timing: If you are thinking about applying for a significant loan, like a mortgage, it’s smart to spread out your credit applications to lessen the impact on your credit score. Lenders generally understand that consumers may shop around for better rates, so multiple inquiries within a short period for the same type of credit may be viewed as just one inquiry.

3. Emphasize Positive Credit Habits: While credit inquiries do influence your credit score, they are not as critical as factors such as payment history and how much of your available credit you use. Concentrate on making timely payments, reducing debt and handling your credit responsibly. Over time, these positive habits will have a more significant impact on boosting your credit score compared to the temporary effects of credit inquiries.

In conclusion, although credit inquiries can somewhat affect credit repair efforts, they are just one part of the bigger picture. By focusing on managing your credit responsibly and minimizing unnecessary applications for new credit accounts, you can reduce their impact and continue working towards improving your overall credit standing over time.