5. Apply only for the credit you need
Whenever you apply for a new line of credit, a serious investigation is done on your report. This type of survey temporarily lowers your score. Applying just to see if you’re approved or because you’ve received a prequalified credit offer isn’t a good idea.
If it is a single hard loan, the decrease will be slight. However, a series of serious inquiries could signal lenders that you are taking on too much debt. According to a representative from TransUnion, the effects of hard credit on your score can last for up to 12 months.
If you need to apply for new credit, research your likelihood of approval to make sure you’re a good candidate before you apply. If possible, get pre-approved or pre-qualified, as in many cases this results in a soft rather than a hard call for credit. Soft Draws Don’t Affect Your Credit Score You don’t want to risk lowering your score for a denied claim.
You should also refrain from applying for multiple credit cards in a short period of time, or before taking out a large loan such as a mortgage.
When shopping for a mortgage, auto or personal loan, you can minimize inquiries by performing rate comparisons in a short period of time. Requests for the same type of loan within a specified time will only appear as one firm request. According to FICO, this period can vary from 14 to 45 days.