"Inquiries" Why Does It Matter

What is the definition of an inquiry and what does it matter to the credit conscious consumer?

"CREDIT INQUIRY - An attempt to seek information concerning interest rates and the availability of funds without disclosing your identity, or specifying the need or purpose of the proposed borrowing, or the specifics concerning your creditworthiness."(www.lectlaw.com)

When you take into effect that a credit inquiry can effect up to 10% of your overall credit score you may want to start paying attention. A rule of thumb is to be careful with these inquiries not to accrue more than 4 every two years. If you need to shop for loans, as for a mortgage or some other large sum then try and have the inquiries occur within a 10-14 day period. After seeing thousands of credit reports I can tell you that those who limit their inquiries usually take care of the other aspects of their credit report.

To make it as simple as possible let me illustrate it like this. Imagine you are playing a game similar to 20 Questions. In this game however it is more like 4 Questions or 4 Inquiries.

Use them wisely -which means avoid giving your full name to used car dealers. They seem to have an affection of running your credit to see what mid sized sedan they can squeeze you into.