topic Re: How do multiple credit card inquiries in a short time appear on your report? in Understanding FICO® Scoring

How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 14:57:16 GMT

Just started building credit 6 months ago. In my research I've read all over that multiple inquiries of a specific type are treated as only one inquiry on your report, if done in a short time (ive heard one week to one month), however i dont know how this could be true when with every inquiry it seems the name of the company that pulls your file is listed. If it only counts as one even though you apply at three different financial institutions over the course of a week, what name comes up on your report as being pulled?

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 15:16:41 GMT

The muliple inquiries in a short time showing as one applies to things like mortgages and car loans where you may be shopping for a rate. The same does not apply to cards.

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 15:21:18 GMT

Thanks

Re: How do multiple credit card inquiries in a short time appear on your report?

UncleB — Mon, 19 Dec 2016 15:34:41 GMT

@Anonymous wrote:
Just started building credit 6 months ago. In my research I've read all over that multiple inquiries of a specific type are treated as only one inquiry on your report, if done in a short time (ive heard one week to one month), however i dont know how this could be true when with every inquiry it seems the name of the company that pulls your file is listed. If it only counts as one even though you apply at three different financial institutions over the course of a week, what name comes up on your report as being pulled?

Welcome to the forums!

What you're describing is what happens with inquiries for auto loans and mortgages, but unfortunately it doesn't work for credit cards.

It's also important to remember that this only impacts the FICO score calculation; while auto loan and mortgage inquiries only collectively have the impact on FICO of one inquiry (if they are in a short period of time), the individual inquiries are still present and viewable by anyone doing a credit check.

There are some instances where inquiries from the same lender and on the same day are 'merged' into one by the credit bureaus, but that's different from what you're describing here. I'll ask a moderator to relocate this thread to 'Understanding FICO Scoring' where you'll get more in-depth replies.

Edited to clarify/add - the auto loan/mortgage inquiries must be within a short period of time of each other to count as one for FICO purposes.

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 17:16:35 GMT

Sorry to hijack thread but in my case it didn't work out this way? I went car shopping a month ago and got 20 new inquiries on my credit report.

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 17:22:20 GMT

By the way, the inquiries need to be of the same type if they are to be counted as one. Thus, if you had one auto inquiry and one mortgage inquiry in the same narrow window of time, these would be counted by FICO as two separate inquiries.

If you had 3 auto inquiries and 4 mortgage inquiries, these would also be counted as two inquiries by FICO. (3 auto = 1 auto, 4 mortgage = 1 mortgage).

UncleB, can you confirm?

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 17:25:21 GMT

@Anonymous wrote:
Sorry to hijack thread but in my case it didn't work out this way? I went car shopping a month ago and got 20 new inquiries on my credit report.

Hello! You may have posted before you saw UncleB's response. He writes:

It's also important to remember that this only impacts the FICO score calculation; while auto loan and mortgage inquiries only collectively have the impact on FICO of one inquiry (if they are in a short period of time), the individual inquiries are still present and viewable by anyone doing a credit check.

Re: How do multiple credit card inquiries in a short time appear on your report?

SouthJamaica — Mon, 19 Dec 2016 17:25:46 GMT

@Anonymous wrote:
Just started building credit 6 months ago. In my research I've read all over that multiple inquiries of a specific type are treated as only one inquiry on your report, if done in a short time (ive heard one week to one month), however i dont know how this could be true when with every inquiry it seems the name of the company that pulls your file is listed. If it only counts as one even though you apply at three different financial institutions over the course of a week, what name comes up on your report as being pulled?

It's not true.

Re: How do multiple credit card inquiries in a short time appear on your report?

SouthJamaica — Mon, 19 Dec 2016 17:26:54 GMT

@Anonymous wrote:
Sorry to hijack thread but in my case it didn't work out this way? I went car shopping a month ago and got 20 new inquiries on my credit report.

That's not hijacking a thread.

That's called giving OP and others important information

Re: How do multiple credit card inquiries in a short time appear on your report?

SouthJamaica — Mon, 19 Dec 2016 17:27:43 GMT

@UncleB wrote:
@Anonymous wrote:
Just started building credit 6 months ago. In my research I've read all over that multiple inquiries of a specific type are treated as only one inquiry on your report, if done in a short time (ive heard one week to one month), however i dont know how this could be true when with every inquiry it seems the name of the company that pulls your file is listed. If it only counts as one even though you apply at three different financial institutions over the course of a week, what name comes up on your report as being pulled?
Welcome to the forums!

What you're describing is what happens with inquiries for auto loans and mortgages, but unfortunately it doesn't work for credit cards.

It's also important to remember that this only impacts the FICO score calculation; while auto loan and mortgage inquiries only collectively have the impact on FICO of one inquiry (if they are in a short period of time), the individual inquiries are still present and viewable by anyone doing a credit check.

There are some instances where inquiries from the same lender and on the same day are 'merged' into one by the credit bureaus, but that's different from what you're describing here. I'll ask a moderator to relocate this thread to 'Understanding FICO Scoring' where you'll get more in-depth replies.

Edited to clarify/add - the auto loan/mortgage inquiries must be within a short period of time of each other to count as one for FICO purposes.

Re: How do multiple credit card inquiries in a short time appear on your report?

UncleB — Mon, 19 Dec 2016 17:36:24 GMT

@Anonymous wrote:
By the way, the inquiries need to be of the same type if they are to be counted as one. Thus, if you had one auto inquiry and one mortgage inquiry in the same narrow window of time, these would be counted by FICO as two separate inquiries.

If you had 3 auto inquiries and 4 mortgage inquiries, these would also be counted as two inquiries by FICO. (3 auto = 1 auto, 4 mortgage = 1 mortgage).

UncleB, can you confirm?

Absolutely... this has always been my personal experience as well.

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 18:23:38 GMT

So why did mine show up as 20 new inquiries if this is how it works?

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 18:26:49 GMT

Also worth observing is that FICO doesn't have any magic ability to detect when an inquiry is auto-related vs. mortgage-related vs. neither. The only thing FICO has to go on is how that inquiry was reported to the CRA.

Therefore the following is quite possible:

* Bob goes shopping for a car. He goes to several dealerships in a ten-day period. He gives his social security number to each one. By Day 11 he has racked up 50 inquiries.

* Of those 50 inquiries, 44 are properly coded by the lender as auto-related. But 6 are not.

* From the perspective of FICO, therefore, Bob has 7 inquiries.

I have no way of guessing how likely that scenario is. Perhaps the likelihood is 1 out of 1000. Perhaps it is far higher. But it is certainly possible.

Moreover, there's no real way to find out whether all 50 are being detected as Auto. You can review your report, but even if the report doesn't list each one as of type Auto, it's possible that there is a database flag that was tripped in those six cases that we don't see that enables FICO to tell. Maybe!

Finally if you are able to ascertain that some of the inquiries are improperly coded, it will involve disputing each of them to get them changed.

Because of all that, some of us avoid excessive auto loan shopping. Insted we get our financing set up in advance with a credit union and then use that as leverage to get the auto dealer to knock a lot off the sticker price. You can still do your auto loan shopping at the end when you are almost ready to buy -- you are not locked in to using your CU. I have just chosen to set things up initially through a CU so that I can negotiate from strength and not give my SS # out to every dealer I go to.

Furthermore, I have not found it terribly difficult to call half a dozen lenders and ask them what are the best terms they offer to someone with a solid income, low debt, and a great FICO score. They might initially ask me for my SSN but I typically can get an interest rate quote when I explain that I am just scouting around and that I don't give out my SSN till I am ready to buy.

I also just really don't like 50 inquries being visible on the report.

The caveats I have given above are based my own personal preference -- in general rate shopping is considered a fairly safe thing to do. I just don't like to do more of it than I really need to, for all the reasons I list above.

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 18:40:13 GMT

@Anonymous wrote:
So why did mine show up as 20 new inquiries if this is how it works?

@Anonymous asked about this earlier today, but may not have seen my response. Uncle B explained it earlier when he wrote:

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 18:42:37 GMT

Thus, all 20 of the inquiries will be present on your report, but the FICO score will consider them as only one inquiry.

Re: How do multiple credit card inquiries in a short time appear on your report?

Anonymous — Mon, 19 Dec 2016 19:28:40 GMT

You're right, I didn't see your response. Thanks 😁