Companies looking up your credit report?
Answers:
It would depend on the type of inquiry. As the above poster states there are 2 types of inquires a hard and a soft.
Does that mean that everytime a company pulls a hard inquiry on your credit it affects your score? Not necessarily.
Within the FICO scoring algorythms it takes into account the type of inquiry its is. For credit card inquiries you will get "dinged" every single time. Now when it comes to Auto Loans and Mortgages, they give you a little more leway.
The rules for inquiries pertaining to Auto and Mortgage loans is as follows. Any reports pulled within a 14 period for Auto and Mortgage Loans count as one inquiry. They do this to accomodate for the fact that you dont simply go to one dealership or lender in search of these types of loans. Also any Auto or Mortgage inquiry do not affect your score for the first 30 days that the inquiry was made ( I believe its 45 for Equifax ) and then the 14 day rule applies after.
There will be some that say this isnt true because theirs dropped once they applied for a mortgage or auto loan, but from all the reports I have seen 99.9% of the time something else within their reports cause the score to drop and not the inquiry.
Here is a snippet from the Myfico website to back me up.
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The score allows for "rate shopping". If you're looking for a mortgage or an auto loan, you may want to check with several lenders to find the best rate. This can cause multiple lenders to request your credit report, even though you're only looking for one loan. To compensate for this, FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. When you need an auto or home loan, you can avoid lowering your FICO score by doing your rate shopping within a short period of time, such as 14 days.
Yep, this is very true.
The idea behind is that if a company sees a lot of inquiries on a credit report, they're thinking, "is this person in financial trouble? does he need a credit card to get through a rough time?" As a result, your risk score goes up, as will the possibility of being declined for a credit card, or a mortgage.
Due to this, the FCRA requires any company to obtain your approval before pulling your credit report. If they do without? Well, they could be liable for $1000 or more depending on how it has effected you (IE: you are not eligible for a mortgage because of their unauthorized pull).
well not every time..if you have over a certain number of inquiries over a 6 month period then your score will be lowered...so make sure when you apply for credit you really want it
There are hard inquiries that normally lower your score and soft inquiries that do not lower your score. Hard inquiries are usually the result of you applying for credit. Soft inquiries could occur when one of your creditors pulls a credit report for an account review, an insurance company pulls your report when you apply for insurance (life, auto, etc), or when a potential employer pulls your report.
If you didnt authorize them they will not affect it. These are "soft" pulls that dont change your score.
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