When you apply for credit the creditor or lender checks your
credit report to verify that you qualify for the credit or loan
you are applying for. The "inquiry" is then reported to the
credit bureaus and shows up on your credit report.
Does this affect your credit rating or score?
Yes, it does. Although only a few points are deducted from your
score for each inquiry, having multiple inquiries may drop your
score to a lower bracket, forcing a higher interest rate. You
may not even qualify for the loan or line of credit at all.
Will requesting your credit report generate an inquiry?
This is a common misconception and is totally false. You should
view your report at least once a month. Doing so will not
generate any inquiries.
What if you did not authorize an inquiry, can you dispute
it?
Yes. If you did not authorize any of the inquiries on your
credit report you can and should dispute them. To dispute
inquiries obtain your credit report, then make a copy of your
credit report, highlighting the inquiries in dispute. Finally,
send the copy of your highlighted inquiries along with a letter
demanding the inquiries be deleted from your credit report to
the credit bureau.
Is it worth it?
The next time you are out shopping and the salesperson asks you, "Would you like to apply for our credit line and receive 15% off
your purchase?" Ask yourself, "Is it worth it?"
