Would it Hurt My Credit Score if I’m Denied Credit?
Whenever you obtain a loan or credit card, the credit grantor critiques your credit report and score usually using an computerized underwriting system. A credit inquiry is placed on your credit file, which indicates that a business has reviewed your file. The query includes the business name and date of the query. The inquiry doesn't indicate whether your application was approved or denied.
One thought is always to make an effort to match a newly opened account with a recent inquiry as a rudimentary method of determining whether or not the inquiry lead to an approval or denial of credit. However, it is unlikely loan providers would attempt to match the inquiry with an account. The fact that an account wasn’t opened doesn’t necessarily indicate that you were declined; you might have decided not to accept the credit card or loan. And, the lender may choose not to report their accounts to the credit agencies.
Inquiries for credit during the past 12 months could affect your score. To deal with shopping for a mortgage, car loan or student loan, queries of these kinds within the past 30 days are not counted. Prior to that, mortgage and auto inquiries within each 45 day period are combined as one inquiry. It is advisable to do your credit shopping within a Thirty day period.
Applications for other loans or credit cards do not benefit from the same treatment. The fact that you were rejected does not hurt your score, but the query can have an impact dependant on its type. Too many inquiries in a short period of time will have more of an impact than isolated inquiries. By law, you are to receive a written justification of the reason why you were declined and where to get a copy of the information that was used. If it was a credit reporting agency, you would be given the name, address and phone number. And, after July 21, 2011 (yesterday) the denial has to be accompanied by the same credit score used by the lender to make their decision.
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