Why does your credit get hurt when a company checks your credit?

Answer 1

if you have a inquire and no loan it looks like some els turned you down for a loan. So they think why should they give you a loan and what are you hiding?

Answer 2

It is an inquiry; an attempt or search for new credit. There is a slight ding for inquiries regardless beacause you are a slightly higher risk if you get more credit. Multiple inquiries in a short time frame looks like you are trying to get credit--and failing.

The less inquiries, the better. Remeber, your credit worthiness is represented by your fico score, which takes into account a lot of different things. Inquiries are not a big deal if you pay your bills on time and have low balances.

Answer 3

In short yes. If you apply for credit it counts as an inquiry. A credit score will be reduced by a few points for an inquiry. If the inquiry is a soft inquiry with an existing creditor, or a marketing inquiry, it should not effect your score.
In general the rule is common sense, only apply for credit when needed, or a few times per year.

Answer 4

There are two levels of a credit check. The first is routinely done by banks and such who then say you are "prequalified" for their credit card and make you an offer. Then there is the check which is done after you have applied for credit. Neiother hurts your existing credit in any way. The 2nd results in an entry in your credit report, the 1st does not. these entries do not hurt nor help you. They are neutral information, like addresses of where you have lived. If you apply for credit and are refused, you have the right by law to informed as to the reason you were refused. This will come in the form of a letter which will state the reason. At this point, you are entitled to a free copy of the credit report used as a basis to refuse you credit. AAt this point, you ask for a copy of the report which will come in 1 to 6 weeks. At that point, find the entry they refer to and see if is really yours. They make a lot of entries in error which can result in a bad report. I know, it happened to me and took a year and a class action court case to resolve. In my case, I got divorced. About 5 years later, I went and applied for credit cards with lower rates than the ones I had. The first one I applied for, refuse me, on the grounds of a bankruptcy. i was gainfully employed, recently had refinanced my house to get a lower rate and had NOT defaulted on any bills, including my ex-wife's. My credit report did indeed show Sears had filed an entry about bankruptcy discharging the debt. The only problem was this was 4 years after the divorce! It seems, she had a Sears account and had also gotten a 2nd card in my name. When we divorced, she "forgot" to remove my name from her account. When she filed for bankruptcy, Sears filed an entry under both of our names on the account. A month or so later, I was contacted by a lawyer about participating in a class action law suit to correct exactly this kind of error, records tied together after a divorce. The class action suit was successful, and the offending entries (which were my ex-wife's) were removed from my credit history. As part of the class action suit, I was able to obtain my records from all 3 agencies and force them all to make corrections. It took a year to finally get it all straightened out. So, this is how I know that a simple credit check does NOT help nor hurt your credit rating. Now, if you have things like late payments and such, that WILL hurt you. It does not mean you will be refused credit, but you may end up with a much higher rate.

Answer 5

Usually it won't if only one or two check. If you have several then that's when it can hurt. It looks to them like you are over extending yourself. In other words you might be getting more credit than you can actually pay back.

Answer 6

huh?