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October 25, 2007


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There's a distinction to be made here, FMF. Mortgage inquiries are treated differently than all other inquiries. Multiple mortgage inquiries within a month are treated by the bureaus (by law) as one inquiry in the calculation of credit scores. So it's not that multiple inquiries of any type within a month are OK . . . that is only true for mortgages (and perhaps autos, if I remember correctly). For all other inquiries, every one matters. 3 credit card inquiries within a month is most definitely a bad thing.

The reason is simple. Multiple mortgage or auto inquiries = rate shopping, which is an acceptable behavior. Multiple inquiries for personal lines, credit cards, etc. = desperate for credit, a sign of a very risky borrower. Inquiries, as you said above, can be very meaningful in determining risk. Risk of delinquency, charge-off, and bankruptcy go way up when a person has many inquiries.

very informative piece, I can see the logic behind it. Why would someone apply for multiple credit cards anyhow.

Yes, it is true, too much credit cards, will surely affect your credit score. One should limit the expenses made through the credit cards to save the credit score. Because credit score is much important if you want a loan to buy home or a car.

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