Money Talk Monday: What affects my credit?

If you apply for different lines of credit, or a car loan, or a house loan all around the same time, does it affect your credit? Someone told me if I’m shopping for a car and several different dealers check my credit, it will take my credit down a few points.

Ashlea Ebeling on, 5/13/2013, reports “More than a third of folks surveyed thought that each time a lender makes an inquiry re your credit score, it can lower your score.”

But multiple inquiries relating to a mortgage or auto loan won’t lower your credit score if bunched into a one to two week window. The multiple inquiries are counted once to make sure rate shopping isn’t penalized.

This is important because consumers who believe inquiries will lower scores will be less likely to shop around for loans and that can cost them an additional tens of thousands of dollars in interest costs, said Stephen Brobeck, the CFA’s executive director.

On the other hand, applying for a lot of store credit cards would raise a red flag, Burns notes, the question being, “Why are you applying for so much credit?”

And while we are talking about what does or does not affect your credit, Ms. Ebeling also reports that “If you co-sign a student loan for a child, your score is likely to decrease. Then it will improve if your child makes payments on time. Just one missed payment—even if it’s 10 years later—will impact your score. Defaults can be “devastating” to a consumer’s credit profile.”

One more point, being married, your age, ethnicity, geographic location and religion will not affect your credit score.

What does affect it? High balances on credit cards, personal bankruptcy, missed payments and taking out unnecessary loans.

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