Credit Inquiry
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How are Credit Inquiries Factored into FICO scores?
Information provided in whole or part by myFico.com and LandAmerica Credit Services
There are five types of information used to calculate a FICO score at any given point in time. Each type of information counts as a percentage of a total FICO score:
Payment History = 35%
Amounts Owed = 30%
Length of Credit History = 15%
New Credit = 10%
Types of Credit in Use = 10%
These percentages are based on the importance of the five categories for the general population. For particular groups, such as people with relatively short credit histories, the importance of the categories may differ.
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 scores.
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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