You always want to shop around for the best deal, but when does this affect your credit? Find out what you need to know about credit enquiries.
Your credit report is a comprehensive record of your history as a borrower, both negative and positive. While you may think only the credit accounts you've held are listed on your credit file, any application you've made for credit is also listed. This helps lenders understand your shopping and borrowing patterns and better determine your level of risk.
What are credit enquiries?
Every time you make an application for credit it's listed on your credit file as a "credit enquiry". It will be listed regardless of whether the application is approved or not. Types of accounts you can make enquiries for are credit cards, personal loans and even utilities such as phones, gas and electricity.
The credit enquiry listing will include the name of the credit provider, the date the application was made and the type of credit you requested. While there is no "approved" or "denied" listed next to a credit enquiry listing, any credit provider looking at your account can match up the number of credit enquiries made to the amount of accounts that have been opened to get an idea of how many accounts you may have been rejected for.
How long do credit enquiries remain on my credit file?
Information regarding credit enquiries you've made is held on your credit file for five years.
What do credit enquiries look like on my credit report?
When you order your free credit report from finder, which is provided by Experian, credit enquiries will be displayed as follows:
Are credit enquiries "good" or "bad" listings?
Credit enquiries are largely neutral listings as they aim to give a credit provider a more fully rounded view of your activities as a borrower. However, making too many credit enquiries in a short space of time can have a negative impact on your credit score and make it difficult for you to be approved for credit.
Similarly, if you've recently been rejected for a credit application it may be a red flag to lenders. This is why it's good to space out your credit enquiries rather than make multiple applications in a short period. Check your credit report for free today