Shop Around for Those Rates
Just 7 percent of those surveyed knew that making several inquiries about a consumer loan, like a car loan or mortgage, in a short period of time won’t lower a borrower’s credit score. In fact, consumers should check multiple lenders to be sure they are getting the best rate, Stephen Brobeck, the federation’s executive director, said in a telephone briefing about the findings. This misunderstanding may hamper comparison shopping for interest rates, and end up costing consumers extra on their loans, he said.
Generally, multiple similar inquiries within a one- to two-week period are recognized as comparison shopping, so they count as one inquiry and don’t greatly affect your score, he said. Even if the inquiries span more than two weeks, it’s generally worth the effort because the potential savings outweigh a minor impact on your score, he said. “Consumers should not worry that comparison shopping for a loan in a week or two will lower their scores,” he said.
The Bucks blog is tackling credit scores this morning, and is reminding people that it’s okay to shop around for better rates if you’re looking to take out a loan and are worried about your credit score. I only think about my credit score whenever I’m apartment hunting because landlords are eyeballing the score to gauge whether or not I’ll be a risky tenant. The best way to maintain a good score (or to improve it) is to pay your bills on time and pay down your debt if you have it.