How Much Do Inquiries Drop Score?

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I just purchased my second property and plan to purchase 4-6 more over the next year using primarily traditional (bank) financing. How many points can I expect lender inquiries to drop my credit score (now slightly over 700). Are we talking 3- 7 points or 15-20???

Also, using 100% finan. helps me use cash for other things- in long run, good or bad for credit?

Thanks :-D
MRE

Comments(5)

  • JohnMichael11th October, 2004

    Not all inquiries count toward your FICO score.
    When you check your credit report, you may notice that a number of credit inquiries have been made, sometimes from businesses that you don’t know. But the only inquiries that count toward your FICO score are the ones that result from your applications for new credit.

    Inquiries that count toward your FICO score.
    There is only one type of credit inquiry that counts toward your FICO score. When you apply for a mortgage, auto loan or other credit, you authorize the lender to request a copy of your credit report. These types of inquiries, prompted by your own actions, appear on your credit report and are included in your FICO score.

    Inquiries that don’t count toward your FICO score.
    Your own credit report requests, credit checks made by businesses to offer you goods or services, or inquiries made by businesses with whom you already have a credit account do not count toward your FICO score. Credit checks by prospective employers also do not count. These types of inquiries may appear on your credit report, but they are not included in your FICO score.


    Understanding Your Credit Score Get the Facts About Credit Scores download it for free at http://www.myfico.com/Offers/myFICO_UYCS%20booklet.pdf


    Inquiries are a subset of the "new credit" category shown above, which accounts for 10% of the total FICO score. Their importance depends on the overall information in your credit report. For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. What's important is the mix of information, which varies from person to person, and for any one person over time.

    Inquiries may or may not affect your FICO score.

    A FICO score takes into account only voluntary inquiries that result from your application for credit. The information about inquiries that can be factored into your FICO score includes:

    Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account.
    Number of recent credit inquiries.
    Time since recent account opening(s), by type of account.
    Time since credit inquiry(ies).

    A FICO score does not take into account any involuntary inquiries made by businesses with whom you did not apply for credit, inquiries from employers, or your own requests to see your credit report.
    For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their FICO score at all. For others, one additional inquiry would take less than 5 points off their FICO score.
    Inquiries can have a greater impact, however, if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk: People with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports.
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  • Mario1177913th October, 2004

    Normally they drop the score 2-3 points. However, that can vary greatly and it is based on your credit report. If you are applying for mortgages, all inquires in a 14 day period count as one inquiry in terms of your score. The more inquires you have, the more it will affect your score. According to Fair Issac (the makers of the FICO score system), you can lose up to 20 points by having 5-9 inquiries on your report. Again, that is part of a much more complex formula, so your results may differ. Best of luck.

    Sincerely,

    Mario Costanz

  • dlitedan13th October, 2004

    be careful what you hear about inquiries not dropping your score. I heard some things and belived them and it messed me up. I was told if credit was pulled for the same thing(mortgages) then it would not lower my score, wrong. I had a 715 middle score and in a matter of about 4 weeks I probably had it pulled 4 times and it dropped to a 694 middle. I dont understand the rules of lowering your score, so be careful.

  • Mario1177915th October, 2004

    dlitedan,
    Two things are possible with your situation. First could be that you had other factors that changed your score in that month. Your balance on your credit cards and other accounts can change your score dramatically. Often times, your score will change even if nothing happens. The other thing that could have happened is that the place you ran your credit did not specify that it was a mortgage inquiry. That could have lowered your score as well.

  • GregTanner15th October, 2004

    FICO says that all mortgage and auto inquiries in a 14 day period count as one. Inquiries can make up as much as 10 percent of your score. Fico throws inquiries in with "new credit" on your credit report. There is no exact science when it comes to determining how much an inquiry will cost you so try to keep them to a minimum. Also, when rate shopping, try to present a broker with your credit report and score and get an opinion on a rate rather then letting them pull your report. Obviously, before they can lock a rate they will have to pull your report, but at least you can get an idea beforehand. Hope this helps.

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